https://www.oilcapital.com/companies/news/218068/powerhouse-energy-moves-forward-in-drive-for-clean-energy-218068.html PowerHouse Energy moves forward in drive for clean energy https://www.oilcapital.com/companies/news/218068/powerhouse-energy-moves-forward-in-drive-for-clean-energy-218068.html Fri, 19 Jul 2019 11:01:00 +0100 https://www.oilcapital.com/columns/vsa-capital-market-movers/31079/vsa-capital-market-movers---lake-resources-31079.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/31079/vsa-capital-market-movers---lake-resources-31079.html Fri, 19 Jul 2019 08:03:00 +0100

VSA Morning Miner, 19/07/19

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Tectonic Gold (LON:TTAU)

Tectonic Gold (LON:TTAU) has announced that it is preparing a submission for the Australian Federal Government R&D Tax Incentive Scheme and that it has been approved to participate for the 2018/2019 tax year. Given TTAU’s use of innovative and advanced new technology particularly in relation to deep penetrating geophysical techniques as well as working closely with universities to redefine the regional geological model the company has benefited significantly from the scheme in the past which provides a 43.5% cash rebate on all qualifying technical expenditure. Since inception Signature Gold, now TTAU, has reclaimed A$2.5m.

Although the quantum of the claim is being prepared for submission and the outcome is not yet known the company has indicated that it intends to utilise any funding received to advance the Mt Cassidy project with diamond drilling beyond the 15 historical holes that have been drilled. It is thought that a shallow porphyry target is present given structural alterations and geochemistry supportive of IRGS structures.

Funding support which is non-dilutive is of particular benefit to exploration companies and given the successful claims in the past we anticipate that TTAU will continue to benefit.
We reiterate our Speculative Buy recommendation.

 

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https://www.oilcapital.com/companies/news/224165/capstones-microturbines-powered-through-recent-new-york-city-blackout-224165.html Capstone’s microturbines powered through recent New York City blackout https://www.oilcapital.com/companies/news/224165/capstones-microturbines-powered-through-recent-new-york-city-blackout-224165.html Thu, 18 Jul 2019 15:38:00 +0100 https://www.oilcapital.com/companies/stocktube/14137/united-oil-delivering-on-strategy-as-it-achieves-excellent-outcome-from-crown-sale-14137.html United Oil delivering on strategy as it achieves ‘excellent’ outcome from Crown sale https://www.oilcapital.com/companies/stocktube/14137/united-oil-delivering-on-strategy-as-it-achieves-excellent-outcome-from-crown-sale-14137.html Thu, 18 Jul 2019 14:27:00 +0100 United Oil & Gas PLC's (LON:UOG) Brian Larkin speaks to Proactive London's Andrew Scott after announcing they've signed heads of terms to sell two blocks in the North Sea to Anasuria Hibiscus UK Limited for up to US$5mln.

It includes the Crown Discovery that was initially discovered by energy giant ConocoPhilips in 1998.

Larkin says the work UOG's technical team put in to develop the licence has delivered an excellent outcome for them and on completion should see them realise a significant return.

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https://www.oilcapital.com/companies/news/220152/ceres-power-making-significant-commercial-headway-220152.html Ceres Power making significant commercial headway https://www.oilcapital.com/companies/news/220152/ceres-power-making-significant-commercial-headway-220152.html Thu, 18 Jul 2019 12:48:00 +0100 https://www.oilcapital.com/companies/stocktube/14134/powerhouse-energy-focused-on-pipeline-conversion-into-revenues-and-profitability-14134.html Powerhouse Energy focused on pipeline conversion into revenues and profitability https://www.oilcapital.com/companies/stocktube/14134/powerhouse-energy-focused-on-pipeline-conversion-into-revenues-and-profitability-14134.html Thu, 18 Jul 2019 11:58:00 +0100 Proactive London's Andrew Scott sat down with Powerhouse Energy Group PLC (LON:PHE) CEO Dave Ryan to discuss the outlook for its DMG technology.

A commercial plant using the process will come onstream at the Protos Energy Park in the coming months.

Ryan says he's confident this operating model will expedite the conversion of the interest in the technology into orders.

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https://www.oilcapital.com/companies/news/224137/cadogan-petroleum-chief-executive-to-step-down-in-september-224137.html Cadogan Petroleum chief executive to step down in September https://www.oilcapital.com/companies/news/224137/cadogan-petroleum-chief-executive-to-step-down-in-september-224137.html Thu, 18 Jul 2019 10:00:00 +0100 https://www.oilcapital.com/companies/news/224118/centamin-eyes-production-upside-in-second-half-224118.html Centamin eyes production upside in second half https://www.oilcapital.com/companies/news/224118/centamin-eyes-production-upside-in-second-half-224118.html Thu, 18 Jul 2019 06:58:00 +0100 https://www.oilcapital.com/companies/news/224099/carnarvon-petroleum-about-to-drill-second-appraisal-well-at-dorado-oil--gas-discovery-224099.html Carnarvon Petroleum about to drill second appraisal well at Dorado oil & gas discovery https://www.oilcapital.com/companies/news/224099/carnarvon-petroleum-about-to-drill-second-appraisal-well-at-dorado-oil--gas-discovery-224099.html Thu, 18 Jul 2019 03:44:00 +0100 https://www.oilcapital.com/companies/news/224096/whitebark-energy-adds-to-wizard-lake-land-position-following-successful-bid-224096.html Whitebark Energy adds to Wizard Lake land position following successful bid https://www.oilcapital.com/companies/news/224096/whitebark-energy-adds-to-wizard-lake-land-position-following-successful-bid-224096.html Thu, 18 Jul 2019 02:38:00 +0100 https://www.oilcapital.com/companies/news/224079/point-loma-resources-to-potentially-sell-its-interest-in-wizard-lake-oil-asset-224079.html Point Loma Resources to potentially sell its interest in Wizard Lake oil asset https://www.oilcapital.com/companies/news/224079/point-loma-resources-to-potentially-sell-its-interest-in-wizard-lake-oil-asset-224079.html Wed, 17 Jul 2019 13:58:00 +0100 https://www.oilcapital.com/companies/stocktube/14117/deal-with-doosan-opens-up-huge-korean-market-for-ceres-says-ceo-caldwell-14117.html Deal with Doosan opens up huge Korean market for Ceres says CEO Caldwell https://www.oilcapital.com/companies/stocktube/14117/deal-with-doosan-opens-up-huge-korean-market-for-ceres-says-ceo-caldwell-14117.html Wed, 17 Jul 2019 11:23:00 +0100 Fuel cell specialist Ceres Power PLC’s (LON:CWR) partnership with Doosan fulfils a key priority of breaking into the Korean market, chief executive Phil Caldwell told Proactive.

The deal is the latest in a string of collaborations with household name engineers.

Doosan is one the largest fuel cells groups in Korea and is likely to play a major part in the desire of the government there to have 15Gw of fuel cell capacity in place by 2040.

Caldwell says this is the first time it has worked with the Korean company but hopes it will be the start of a long-term relationship.

Ceres had been working to seal the deal with Doosan for a year, he added.

In October, Ceres sees the first commercial launch of a product containing its technology through Japanese boiler maker Miura, another of its long-term licensing partners.

Ceres started to work with Miura in 2016, which shows how good we are getting at building long-term partnerships, added Caldwell.

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https://www.oilcapital.com/companies/news/224062/united-oil--gas-to-sell-north-sea-blocks-for-up-to-us5mln-224062.html United Oil & Gas to sell North Sea blocks for up to US$5mln https://www.oilcapital.com/companies/news/224062/united-oil--gas-to-sell-north-sea-blocks-for-up-to-us5mln-224062.html Wed, 17 Jul 2019 11:01:00 +0100 https://www.oilcapital.com/companies/stocktube/14116/highlands-natural-resources-showcases-cbd-products-ahead-of-uk-launch-14116.html Highlands Natural Resources showcases CBD products ahead of UK launch https://www.oilcapital.com/companies/stocktube/14116/highlands-natural-resources-showcases-cbd-products-ahead-of-uk-launch-14116.html Wed, 17 Jul 2019 10:31:00 +0100 Highlands Natural Resources PLC's (LON:HNR) Nick Tulloch chats to Proactive London's Andrew Scott ahead of the start of sales of their cannabidiol (CBD) products in the UK this month.

The oil and gas company made the move into CBD back in March this month.

Tulloch says the first product lines to be sold in the UK will be CBD tinctures available in natural, peppermint, melon and blood orange flavours at strengths of 500mg or 1,000mg.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/31071/vsa-capital-market-movers---columbus-energy-resources-31071.html VSA CAPITAL MARKET MOVERS - Columbus Energy Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/31071/vsa-capital-market-movers---columbus-energy-resources-31071.html Wed, 17 Jul 2019 08:27:00 +0100

Columbus Energy Resources: SWP Maiden Voyage

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Columbus Energy Resources (LON:CERP) has announced its intention to drill a low cost well in early Q3 2019 with a second well likely to follow soon after. Each likely to take two to three weeks to complete and are located within CERP’s wholly owned licenses on the highly prospective South West Peninsula (SWP). We highlight the high chances of success for these exploration wells of 45% and 65%. One initial target indicates a mean prospective resources of 66mmbbls and our analysis suggest a NAV of US$81m with the potential to deliver near term and transformational growth which could be largely funded internally based on management guidance.

Private Petroleum License

YTD oil prices have traded broadly within a narrow range of US$50-60/bbl bar a brief break out in April. This price range is uniquely challenging due to Trinidad’s Supplemental Petroleum Tax (SPT) which has hampered CERP’s workover programme on its established production base. As a consequence, we have reduced our near-term assumptions to a more modest growth trajectory and assume 650bopd for 2019F (plus 20% YoY). However, the terms of exploring the SWP are far more attractive and a renegotiated private petroleum license held over the Bonasse field includes very attractive commercial terms for the initial 10mmbbls recoverable resource meaning the economics of producing from the SWP are significantly more attractive than at CERP’s IPSCs.

CO2 Injection Progressing

CERP’s partner on the Inniss Trinity field Predator Oil and Gas (LON:PRD) announced that a Certificate of Environmental Clearance (CEC) has been received by CERP (the Operator) paving the way for final permitting and field preparations for CO2 enhanced oil recovery testing in Q3 2019. PRD has announced that the recoverable Contingent Resource is estimated at between 5.3mmbbls to 8.9mmbbls (6.8mmbbls best estimate) and PRD has the right to purchase the CERP subsidiary which owns the field for US$4.2m up until 31 December 2019.

Recommendation and Target Price

In addition to strengthening the underlying production base towards a sustainable operating position it has taken two years of preparation to get to this point to ensure that CERP shareholders are positioned to receive maximum benefit from exploration success on the SWP. Now with three major and near-term drivers for value creation; SWP drilling, CO2 injection and a new country entry with a discovered onshore development opportunity we believe that CERP is well positioned for a significant rerating through H2 2019.

We reiterate our Buy recommendation and adjust our target price to 21.6p.

 

 

 

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https://www.oilcapital.com/companies/news/224052/anglo-african-oil--gas-agrees-two-part-fundraising-of-up-to-825mln-224052.html Anglo African Oil & Gas agrees two-part fundraising of up to £8.25mln https://www.oilcapital.com/companies/news/224052/anglo-african-oil--gas-agrees-two-part-fundraising-of-up-to-825mln-224052.html Wed, 17 Jul 2019 08:25:00 +0100 https://www.oilcapital.com/companies/news/224034/bass-oil-to-begin-first-tangai-sukananti-in-field-trials-using-water-injection-to-potentially-increase-output-by-10-224034.html Bass Oil to begin first Tangai-Sukananti in-field trials using water injection to potentially increase output by 10% https://www.oilcapital.com/companies/news/224034/bass-oil-to-begin-first-tangai-sukananti-in-field-trials-using-water-injection-to-potentially-increase-output-by-10-224034.html Wed, 17 Jul 2019 06:27:00 +0100 https://www.oilcapital.com/companies/news/223979/angus-energy-shares-rise-on-new-hire-and-receipt-of-saltfleetby-funds-223979.html Angus Energy shares rise on new hire and receipt of Saltfleetby funds https://www.oilcapital.com/companies/news/223979/angus-energy-shares-rise-on-new-hire-and-receipt-of-saltfleetby-funds-223979.html Tue, 16 Jul 2019 07:28:00 +0100 https://www.oilcapital.com/companies/news/223950/whitebark-energy-welcomes-wa-government-fracturing-implementation-plan-223950.html Whitebark Energy welcomes WA Government fracturing implementation plan https://www.oilcapital.com/companies/news/223950/whitebark-energy-welcomes-wa-government-fracturing-implementation-plan-223950.html Tue, 16 Jul 2019 05:25:00 +0100 https://www.oilcapital.com/companies/news/223931/capstone-bags-first-of-possible-bigger-order-for-microturbines-from-kazakhstan-oil-producer-223931.html Capstone bags first of possible bigger order for microturbines from Kazakhstan oil producer https://www.oilcapital.com/companies/news/223931/capstone-bags-first-of-possible-bigger-order-for-microturbines-from-kazakhstan-oil-producer-223931.html Mon, 15 Jul 2019 15:40:00 +0100 https://www.oilcapital.com/companies/news/223924/energy-fuels-welcomes-president-trump-s-decision-to-review-us-nuclear-supply-chain-223924.html Energy Fuels welcomes President Trump's decision to review US nuclear supply chain https://www.oilcapital.com/companies/news/223924/energy-fuels-welcomes-president-trump-s-decision-to-review-us-nuclear-supply-chain-223924.html Mon, 15 Jul 2019 13:25:00 +0100 https://www.oilcapital.com/companies/stocktube/14086/union-jack-oil-s-biscathorpe-2-well--back-on-the-map--after-new-analysis-14086.html Union Jack Oil's Biscathorpe-2 well 'back on the map' after new analysis https://www.oilcapital.com/companies/stocktube/14086/union-jack-oil-s-biscathorpe-2-well--back-on-the-map--after-new-analysis-14086.html Mon, 15 Jul 2019 09:35:00 +0100 Union Jack Oil PLC's (LON:UJO) David Bramhill tells Proactive London's Andrew Scott analysis of the Biscathorpe-2 well in Lincolnshire has shown it to be much more promising than previously indicated.

Consultant APT has carried out a sample taken from 20 intervals that indicates the presence of a 35-metre column of good quality oil at a depth of a 1,980 metres with more possible below 2,133m.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/31064/vsa-capital-market-movers---egdon-resources-31064.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/31064/vsa-capital-market-movers---egdon-resources-31064.html Mon, 15 Jul 2019 08:07:00 +0100

VSA Morning Flow Test, 15/07/19

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Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has provided an update on the Biscathorpe 2 well following revised petrophysical analysis. Previously it was reported that oil shows were present in the Dinantian but the primary Westphalian sandstone target was interpreted as water wet. However, the revised data following the additional testwork has demonstrated oil shows in the Westphalian as well. In the Dinantian the results indicated hydrocarbon saturations in excess of 50% but the presence of oil in both intervals suggests proximity to an effective petroleum system and confirms the ongoing potential within the license area.

Applied Petroleum Technology Limited (APT) carried out analysis on five samples from the Westaphalian and 15 from the Dinantian confirming the presence of oil in the former and a significant column of good quality in the latter with a full suite of gases from methane to pentane (C1 to C5 and nC5). The column at the top of the Dinantian appears to extend 35m from 1,980m to 2,015m depth with possible additional hydrocarbons below 2,133m. The results from the analysis were compared to the nearby analogue field, Keddington, which produces from the Westphalian demonstrating favourable results. All hydrocarbons appeared to be non-biodegraded with APIs of 35° and 33-34° for the Westphalian and Dinantian respectively.  

These updated results confirm that although absent at the Biscathorpe 2 location there is likely a significant effective petroleum system in near proximity thereby validating EDR’s strategy to continue to assess the license potential through a possible sidetrack and reprocessing of the existing 3D seismic data. We continue to believe that the license offers significant potential which is not fully reflected in EDR’s current price given our Biscathorpe valuation of 3.5p/sh. Whilst in the near term the key catalyst is likely to be the additional results from Springs Road, this announcement highlights the ongoing positive progress being made elsewhere within EDR’s portfolio of conventional as well as unconventional assets.

We reiterate our Buy recommendation and 39p target price.     

 

 

 

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https://www.oilcapital.com/companies/news/223899/block-energy-takes-full-control-of-west-rustavi-asset-in-georgia-223899.html Block Energy takes full control of West Rustavi asset in Georgia https://www.oilcapital.com/companies/news/223899/block-energy-takes-full-control-of-west-rustavi-asset-in-georgia-223899.html Mon, 15 Jul 2019 08:00:00 +0100 https://www.oilcapital.com/companies/news/223897/anglo-african-oil--gas-gives-details-of-dispute-with-rig-contractor-223897.html Anglo African Oil & Gas gives details of dispute with rig contractor https://www.oilcapital.com/companies/news/223897/anglo-african-oil--gas-gives-details-of-dispute-with-rig-contractor-223897.html Mon, 15 Jul 2019 07:47:00 +0100 https://www.oilcapital.com/companies/news/223887/eland-rises-as-it-receives-approval-for-gbetiokun-field-development-plan-223887.html Eland rises as it receives approval for Gbetiokun field development plan https://www.oilcapital.com/companies/news/223887/eland-rises-as-it-receives-approval-for-gbetiokun-field-development-plan-223887.html Mon, 15 Jul 2019 07:30:00 +0100 https://www.oilcapital.com/companies/news/223891/technical-analysis-validates-biscathorpe-potential-say-union-jack-oil-and-egdon-resources-223891.html Technical analysis validates Biscathorpe potential say Union Jack Oil and Egdon Resources https://www.oilcapital.com/companies/news/223891/technical-analysis-validates-biscathorpe-potential-say-union-jack-oil-and-egdon-resources-223891.html Mon, 15 Jul 2019 07:28:00 +0100 https://www.oilcapital.com/companies/news/223890/simec-atlantis-energy-extremely-pleased-as-uskmouth-power-station-conversion-makes-progress-223890.html SIMEC Atlantis Energy ‘extremely pleased’ as Uskmouth power station conversion makes progress https://www.oilcapital.com/companies/news/223890/simec-atlantis-energy-extremely-pleased-as-uskmouth-power-station-conversion-makes-progress-223890.html Mon, 15 Jul 2019 07:24:00 +0100 https://www.oilcapital.com/companies/news/223883/ceres-power-surges-as-it-inks-8mln-agreement-with-south-korean-conglomerate-doosan-223883.html Ceres Power surges as it inks £8mln agreement with South Korean conglomerate Doosan https://www.oilcapital.com/companies/news/223883/ceres-power-surges-as-it-inks-8mln-agreement-with-south-korean-conglomerate-doosan-223883.html Mon, 15 Jul 2019 07:10:00 +0100 https://www.oilcapital.com/companies/news/223879/mosman-oil-and-gas-says-stanley-2-is-now-producing-oil-223879.html Mosman Oil and Gas says Stanley-2 is now producing oil https://www.oilcapital.com/companies/news/223879/mosman-oil-and-gas-says-stanley-2-is-now-producing-oil-223879.html Mon, 15 Jul 2019 06:49:00 +0100 https://www.oilcapital.com/companies/news/223874/providence-resources-advised-that-partner-payment-is-being-processed-223874.html Providence Resources advised that partner payment is being processed https://www.oilcapital.com/companies/news/223874/providence-resources-advised-that-partner-payment-is-being-processed-223874.html Mon, 15 Jul 2019 06:31:00 +0100 https://www.oilcapital.com/companies/news/223865/whitebark-energy-appoints-rig-and-crew-that-successfully-drilled-rex-1-to-start-drilling-rex-2-223865.html Whitebark Energy appoints rig and crew that successfully drilled Rex-1 to start drilling Rex-2 https://www.oilcapital.com/companies/news/223865/whitebark-energy-appoints-rig-and-crew-that-successfully-drilled-rex-1-to-start-drilling-rex-2-223865.html Mon, 15 Jul 2019 04:47:00 +0100 https://www.oilcapital.com/companies/news/223862/carnarvon-petroleums-independent-report-confirms-major-dorado-oil--gas-resource-223862.html Carnarvon Petroleum’s independent report confirms major Dorado oil & gas resource https://www.oilcapital.com/companies/news/223862/carnarvon-petroleums-independent-report-confirms-major-dorado-oil--gas-resource-223862.html Mon, 15 Jul 2019 03:53:00 +0100 https://www.oilcapital.com/companies/news/223838/rose-petroleum-rings-changes-as-oce-comes-on-board-223838.html Rose Petroleum rings changes as OCE comes on board https://www.oilcapital.com/companies/news/223838/rose-petroleum-rings-changes-as-oce-comes-on-board-223838.html Fri, 12 Jul 2019 14:35:00 +0100 https://www.oilcapital.com/companies/stocktube/14080/iofina-reports-strong-start-to-year-with-10-first-half-production-increase-14080.html Iofina reports strong start to year with 10% first half production increase https://www.oilcapital.com/companies/stocktube/14080/iofina-reports-strong-start-to-year-with-10-first-half-production-increase-14080.html Fri, 12 Jul 2019 14:28:00 +0100 Iofina PLC’s (LON:IOF) Tom Becker tells Proactive London's Andrew Scott production at their plants in Oklahoma rose by 10% in the first half of the year.

He says they're guiding for production in the second half of the year of between 305-325 MT of crystalline iodine.

That would take the total for the year up to at least 592 MT and possibly as much as 612 MT.

Becker adds their newest subsidiary, IofinaEX, is now fully licensed to process hemp in the state of Kentucky and they're exploring the isolation of speciality chemical products.

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https://www.oilcapital.com/companies/news/223820/hurricane-spuds-lincoln-crestal-well-off-the-west-coast-of-the-shetland-islands-223820.html Hurricane spuds Lincoln Crestal well off the west coast of the Shetland Islands https://www.oilcapital.com/companies/news/223820/hurricane-spuds-lincoln-crestal-well-off-the-west-coast-of-the-shetland-islands-223820.html Fri, 12 Jul 2019 09:55:00 +0100 https://www.oilcapital.com/companies/news/223814/nu-oil-and-gas-sees-no-impact-from-garden-hill-claim-223814.html Nu-Oil and Gas sees no impact from Garden Hill claim https://www.oilcapital.com/companies/news/223814/nu-oil-and-gas-sees-no-impact-from-garden-hill-claim-223814.html Fri, 12 Jul 2019 07:31:00 +0100 https://www.oilcapital.com/companies/news/223802/anglo-african-oil--gas-decides-to-go-with-riverfort-as-it-works-on-new-funding-223802.html Anglo African Oil & Gas decides to go with Riverfort as it works on new funding https://www.oilcapital.com/companies/news/223802/anglo-african-oil--gas-decides-to-go-with-riverfort-as-it-works-on-new-funding-223802.html Fri, 12 Jul 2019 07:19:00 +0100 https://www.oilcapital.com/companies/news/223799/city-broker-hikes-forecasts-for-iodine-producer-iofina-after-strong-first-half-223799.html City broker hikes forecasts for iodine producer Iofina after “strong” first half https://www.oilcapital.com/companies/news/223799/city-broker-hikes-forecasts-for-iodine-producer-iofina-after-strong-first-half-223799.html Fri, 12 Jul 2019 06:55:00 +0100 https://www.oilcapital.com/companies/news/223768/optiva-has-risked-valuation-of-114p-per-share-for-united-oil--gas-on-a-fully-diluted-basis-223768.html Optiva has risked valuation of 11.4p per share for United Oil & Gas on a fully diluted basis https://www.oilcapital.com/companies/news/223768/optiva-has-risked-valuation-of-114p-per-share-for-united-oil--gas-on-a-fully-diluted-basis-223768.html Thu, 11 Jul 2019 14:40:00 +0100 https://www.oilcapital.com/companies/news/213832/united-oil--gas-performing-strongly-recent-acquisitions-demonstrate-significant-promise-213832.html United Oil & Gas performing strongly, recent acquisitions demonstrate significant promise https://www.oilcapital.com/companies/news/213832/united-oil--gas-performing-strongly-recent-acquisitions-demonstrate-significant-promise-213832.html Thu, 11 Jul 2019 14:30:00 +0100 https://www.oilcapital.com/companies/news/223746/hurricane-energy-shares-jump-as-explorer-plays-down-impact-of-warwick-deep-disappointment-223746.html Hurricane Energy shares jump as explorer plays down impact of Warwick Deep disappointment https://www.oilcapital.com/companies/news/223746/hurricane-energy-shares-jump-as-explorer-plays-down-impact-of-warwick-deep-disappointment-223746.html Thu, 11 Jul 2019 14:20:00 +0100 https://www.oilcapital.com/companies/news/223752/providence-resources-within-touching-distance-of-start-at-barryroe-223752.html Providence Resources within touching distance of start at Barryroe https://www.oilcapital.com/companies/news/223752/providence-resources-within-touching-distance-of-start-at-barryroe-223752.html Thu, 11 Jul 2019 11:25:00 +0100 https://www.oilcapital.com/companies/news/223725/active-energy-gets-cracking-on-the-installation-of-reactors-at-lumberton-223725.html Active Energy gets cracking on the installation of reactors at Lumberton https://www.oilcapital.com/companies/news/223725/active-energy-gets-cracking-on-the-installation-of-reactors-at-lumberton-223725.html Thu, 11 Jul 2019 10:45:00 +0100 https://www.oilcapital.com/companies/news/223737/providence-resources-pushes-back-barryroe-deadline-as-funds-fail-to-appear-223737.html Providence Resources pushes back Barryroe deadline as funds fail to appear https://www.oilcapital.com/companies/news/223737/providence-resources-pushes-back-barryroe-deadline-as-funds-fail-to-appear-223737.html Thu, 11 Jul 2019 07:31:00 +0100 https://www.oilcapital.com/companies/news/223727/paul-atherley-leaves-berkeley-energia-as-it-looks-to-madrid-for-new-hq-223727.html Paul Atherley leaves Berkeley Energia as it looks to Madrid for new HQ https://www.oilcapital.com/companies/news/223727/paul-atherley-leaves-berkeley-energia-as-it-looks-to-madrid-for-new-hq-223727.html Thu, 11 Jul 2019 07:15:00 +0100 https://www.oilcapital.com/companies/news/223708/carnarvon-petroleum-tagged-as-buying-opportunity-by-euroz-223708.html Carnarvon Petroleum tagged as buying opportunity by Euroz https://www.oilcapital.com/companies/news/223708/carnarvon-petroleum-tagged-as-buying-opportunity-by-euroz-223708.html Thu, 11 Jul 2019 03:48:00 +0100 https://www.oilcapital.com/companies/stocktube/14053/buru-energy-preparing-to-mobilise-to-drill-the-adoxa-1-exploration-well-14053.html Buru Energy preparing to mobilise to drill the Adoxa 1 exploration well https://www.oilcapital.com/companies/stocktube/14053/buru-energy-preparing-to-mobilise-to-drill-the-adoxa-1-exploration-well-14053.html Wed, 10 Jul 2019 23:46:00 +0100 Buru Energy Ltd (ASX:BRU) executive chairman Eric Streitberg talks to Proactive Investors about overcoming challenges with a drilling rig and some of the geology on the Ungani Oilfield onshore WA, to move forward positively.
 
Streitberg says while they had some issues, the joint venture partners are confident of good results moving forward, with the rig back up and working perfectly, and lessons learned from the drilling.
 
He adds, Buru Energy was pioneering a technique never before attempted in the Canning Basin, and the company will be redesigning the next well in the Ungani field, to overcome the previous challenges.
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https://www.oilcapital.com/companies/news/223691/junior-oiler-cabot-energy-raises-us05mln-from-majority-shareholder-223691.html Junior oiler Cabot Energy raises US$0.5mln from majority shareholder https://www.oilcapital.com/companies/news/223691/junior-oiler-cabot-energy-raises-us05mln-from-majority-shareholder-223691.html Wed, 10 Jul 2019 14:15:00 +0100 https://www.oilcapital.com/companies/news/223673/credit-suisse-cuts-bp-to-neutral-from-outperform-prefers-french-peer-total-shell-top-pick-223673.html Credit Suisse cuts BP to ‘neutral’ from ‘outperform’, prefers French peer Total; Shell ‘top pick’ https://www.oilcapital.com/companies/news/223673/credit-suisse-cuts-bp-to-neutral-from-outperform-prefers-french-peer-total-shell-top-pick-223673.html Wed, 10 Jul 2019 10:28:00 +0100 https://www.oilcapital.com/companies/news/223670/powerhouse-energy-surges-as-japanese-government-endorses-dmg-technology-223670.html Powerhouse Energy surges as Japanese government endorses DMG technology https://www.oilcapital.com/companies/news/223670/powerhouse-energy-surges-as-japanese-government-endorses-dmg-technology-223670.html Wed, 10 Jul 2019 09:26:00 +0100 https://www.oilcapital.com/companies/news/223660/simec-atlantis-says-underwater-turbines-of-the-meygen-operation-in-scotland-set-new-power-export-record-223660.html SIMEC Atlantis says underwater turbines of the MeyGen operation in Scotland set new power export record https://www.oilcapital.com/companies/news/223660/simec-atlantis-says-underwater-turbines-of-the-meygen-operation-in-scotland-set-new-power-export-record-223660.html Wed, 10 Jul 2019 07:25:00 +0100 https://www.oilcapital.com/companies/news/223658/cairn-energy-reveals-norwegian-exploration-well-is-dry-223658.html Cairn Energy reveals Norwegian exploration well is ‘dry’ https://www.oilcapital.com/companies/news/223658/cairn-energy-reveals-norwegian-exploration-well-is-dry-223658.html Wed, 10 Jul 2019 07:23:00 +0100 https://www.oilcapital.com/companies/news/223646/tlou-energy-ltds-lesedi-4-pod-is-now-set-for-production-223646.html TLOU Energy Ltd’s Lesedi-4 pod is now set for production https://www.oilcapital.com/companies/news/223646/tlou-energy-ltds-lesedi-4-pod-is-now-set-for-production-223646.html Wed, 10 Jul 2019 06:36:00 +0100 https://www.oilcapital.com/companies/news/223643/eland-oil--gas-completes-remedial-work-on-gbetiokun-well-ahead-of-early-production-223643.html Eland Oil & Gas completes remedial work on Gbetiokun well ahead of ‘early production’ https://www.oilcapital.com/companies/news/223643/eland-oil--gas-completes-remedial-work-on-gbetiokun-well-ahead-of-early-production-223643.html Wed, 10 Jul 2019 06:20:00 +0100 https://www.oilcapital.com/companies/news/223620/alternus-energy-completes-its-2018-financial-audit-223620.html Alternus Energy completes its 2018 financial audit https://www.oilcapital.com/companies/news/223620/alternus-energy-completes-its-2018-financial-audit-223620.html Tue, 09 Jul 2019 17:38:00 +0100 https://www.oilcapital.com/companies/news/223610/ades-international-sees-significant-growth-potential-as-backlog-and-end-markets-improve-223610.html ADES International sees significant growth potential as backlog and end markets improve https://www.oilcapital.com/companies/news/223610/ades-international-sees-significant-growth-potential-as-backlog-and-end-markets-improve-223610.html Tue, 09 Jul 2019 14:11:00 +0100 https://www.oilcapital.com/companies/news/223556/ceres-power-raises-expectations-after-transformational-year-223556.html Ceres Power raises expectations after transformational year https://www.oilcapital.com/companies/news/223556/ceres-power-raises-expectations-after-transformational-year-223556.html Tue, 09 Jul 2019 12:15:00 +0100 https://www.oilcapital.com/companies/news/223563/chariot-oil--gas-highlights-anchois-discoverys-potential-for-strong-returns-223563.html Chariot Oil & Gas highlights Anchois discovery’s potential for ‘strong returns’ https://www.oilcapital.com/companies/news/223563/chariot-oil--gas-highlights-anchois-discoverys-potential-for-strong-returns-223563.html Tue, 09 Jul 2019 11:35:00 +0100 https://www.oilcapital.com/companies/news/223584/tower-resources-says-successful-in-appeal-against-an-hmrc-decision-to-deny-it-credit-for-input-vat-223584.html Tower Resources says successful in appeal against an HMRC decision to deny it credit for input VAT https://www.oilcapital.com/companies/news/223584/tower-resources-says-successful-in-appeal-against-an-hmrc-decision-to-deny-it-credit-for-input-vat-223584.html Tue, 09 Jul 2019 09:40:00 +0100 https://www.oilcapital.com/companies/news/223588/ades-has-unsustainably-low-valuation-says-numis-as-it-initiates-at--buy--223588.html ADES has “unsustainably low valuation” says Numis, as it initiates at 'buy' https://www.oilcapital.com/companies/news/223588/ades-has-unsustainably-low-valuation-says-numis-as-it-initiates-at--buy--223588.html Tue, 09 Jul 2019 09:38:00 +0100 https://www.oilcapital.com/columns/vsa-capital-market-movers/31051/vsa-capital-market-movers---dekeloil-31051.html VSA CAPITAL MARKET MOVERS - DekelOil https://www.oilcapital.com/columns/vsa-capital-market-movers/31051/vsa-capital-market-movers---dekeloil-31051.html Tue, 09 Jul 2019 08:12:00 +0100

VSA Morning Agri Comment, 09/07/19

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DekelOil# - Cashew Project Construction

Côte d'Ivoire agricultural company DekelOil Public Limited (LON:DKL) has begun construction of its cashew processing project at Tiebissou in central Côte d'Ivoire, which is due to become its second operational agricultural project in-country.

  • Construction expected to take 12 months, with first processing of smallholder-produced cashews expected in June 2020.
  • DKL holds 37.8% of the project with an option to acquire a further 17.0% to take it to c.55%.
  • Project will employ approximately 300 employees once operational.
  • The cashew project will be exempt from corporation tax for a 10-year period and exempt from 75% of this tax for the subsequent five years. It also has a full exemption from customs duties for all imported materials during the construction phase, which should save c.€350k. These benefits are in-line with a new tax code in the country. DKL’s existing palm oil project was built on the old tax code, which included a 13-year full corporation tax exemption and a 40% customs exemption for imported materials.

VSA Comment

DKL’s FY 2018 demonstrated the risk of being exposed to one agricultural commodity. Therefore, we believe that diversification into the cashew sector is a shrewd one that should help the company deal with any subsequent difficult years in its palm oil business.

With construction now underway, we look forward to first production next June. Although this represents the end of the cashew season in Côte d'Ivoire, DKL will be stockpiling cashews from smallholders in the months prior to opening for subsequent processing by the facility.

Assuming DKL exercises its option to gain a c.55% stake in the project, we estimate that the project could deliver an attributable profit of €2.2m by 2022 to the group.

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

Plant Health Care

11.23

6.50

0.25

+4.0%

Salt Lake Potash

100.51

41.00

1.50

+3.8%

DekelOil

10.74

3.05

0.05

+1.7%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Harvest Minerals

10.04

5.40

(0.30)

-5.3%

Devro

344.62

206.50

(8.50)

-4.0%

Anglo-Eastern Plantations

182.92

461.50

(10.50)

-2.2%

 

 

 

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https://www.oilcapital.com/companies/news/223558/eqtec-directors-agree-reductions-to-remuneration-to-subscribe-for-new-shares-223558.html EQTEC directors agree reductions to remuneration to subscribe for new shares https://www.oilcapital.com/companies/news/223558/eqtec-directors-agree-reductions-to-remuneration-to-subscribe-for-new-shares-223558.html Tue, 09 Jul 2019 06:34:00 +0100 https://www.oilcapital.com/companies/news/223555/greenland-minerals-shares-rise-on-reducing-capital-cost-estimate-for-rare-earth-project-223555.html Greenland Minerals shares rise on reducing capital cost estimate for rare earth project https://www.oilcapital.com/companies/news/223555/greenland-minerals-shares-rise-on-reducing-capital-cost-estimate-for-rare-earth-project-223555.html Tue, 09 Jul 2019 06:14:00 +0100 https://www.oilcapital.com/companies/stocktube/14020/brookside-energy-consolidates-high-grade-position-within-anadarko-basin-14020.html Brookside Energy consolidates high-grade position within Anadarko Basin https://www.oilcapital.com/companies/stocktube/14020/brookside-energy-consolidates-high-grade-position-within-anadarko-basin-14020.html Tue, 09 Jul 2019 02:59:00 +0100 Brookside Energy Limited (ASX:BRK) managing director David Prentice updates Proactive Investors on a recent milestone in leasing and acquisition activities within the SWISH Area of Interest (AOI) in the prolific oil & gas region of Anadarko Basin, Oklahoma.

“We’ve been able to grow our acreage position in SWISH to 2,000 acres now and that’s part of a broader 2,700 acreage position across the greater Anadarko Basin,” he says.

Prentice notes that the next step is to double or triple that 2,000-acreage position over the next 6–12 months, while focusing on core operated development units where material reserve growth will emanate from.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/31050/g3-exploration-refocusing-on-core-expertise-31050.html G3 Exploration: Refocusing on Core Expertise https://www.oilcapital.com/columns/vsa-capital-market-movers/31050/g3-exploration-refocusing-on-core-expertise-31050.html Mon, 08 Jul 2019 13:47:00 +0100

G3 Exploration: Refocusing on Core Expertise

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Having successfully brought blocks GSS and GCZ into commercial production in 2010 and with gross sales of 5.7BCF delivering net profit of US$10.3m achieved in 2018 G3 Exploration (G3E LN) is now well placed to refocus on its core expertise of CBM development and exploration. G3E previously announced its intention to spin out the producing assets via a dividend in specie pending a trade sale or IPO. Currently held for sale at a value of US$390m we see this as the primary catalyst for the shares as this will enable repayment of outstanding debt as well as providing development capital for the remaining core development blocks.

Accelerated Programme to Near Term Production

G3E’s core asset base after the dividend in specie will be the remaining six blocks which like GSS and GCZ are partnered with CNOOC and PetroChina under long standing and attractive PSCs. The near term focus is likely to be on blocks GGZ and GSN, the latter of which is adjacent to the currently producing blocks. With a recapitalisation achievable through the sale of the producing assets we believe that commercial production could be achieved rapidly and we anticipate peak net production of 5.4BCF and 3.1BCf respectively from these development blocks indicating the potential for significant annual cashflow. G3E applies the LiFaBriC drilling technology, which enables a sustained period of peak production which means that at GGZ we anticipate at least five years of free cash flow in excess of US$25mpa.

Broader CBM Opportunities

Although the strategic rationale for CBM in China remains compelling given import dependency of over 40% for natural gas and an ongoing shift from coal for power generation which will see China’s use of coal for primary energy consumption fall from over 60% in 2012 to less than a third by 2050, we see the potential for CBM opportunities beyond China for G3E.

The company has committed to entering a new geography and we see opportunities in terms of gas to power projects in Africa as well as exploiting uneconomically mineable coal seams in jurisdictions such as the UK as possibilities. G3E’s primary drilling technique involves no injection of chemicals and a minimal surface print meaning a limited environmental impact whilst producing natural gas; the key bridge fuel over the coming decades, in our view.

Recommendation and Target Price

We initiate coverage with a BUY recommendation and target price of 98p.

 

 

 

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https://www.oilcapital.com/companies/stocktube/14009/eco-atlantic-s-gil-holzman--proud--as-drilling-starts-on-jethro-lobe-prospect-14009.html Eco Atlantic's Gil Holzman 'proud' as drilling starts on Jethro-Lobe prospect https://www.oilcapital.com/companies/stocktube/14009/eco-atlantic-s-gil-holzman--proud--as-drilling-starts-on-jethro-lobe-prospect-14009.html Mon, 08 Jul 2019 11:39:00 +0100 Eco Atlantic Oil & Gas Ltd's (LON:ECO) (CVE:EOG) Gil Holzman caught up with Proactive London's Andrew Scott soon after announcing that drilling's started on the Jethro-Lobe prospect within the Orinduik Block.

He says the Orinduik partners have estimated the well will take up to 40 days to drill.

Jethro-Lobe will be the first of two wells in the programme with the second following immediately afterwards to test the Joe prospect.

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https://www.oilcapital.com/companies/news/223498/brookside-energy-managing-director-increases-ordinary-shareholding-to-32-million-with-on-market-purchase-223498.html Brookside Energy managing director increases ordinary shareholding to 3.2 million with on-market purchase https://www.oilcapital.com/companies/news/223498/brookside-energy-managing-director-increases-ordinary-shareholding-to-32-million-with-on-market-purchase-223498.html Mon, 08 Jul 2019 08:31:00 +0100 https://www.oilcapital.com/companies/news/223489/block-energy-secures-equipment-for-next-phase-of-west-rustavi-drilling-223489.html Block Energy secures equipment for next phase of West Rustavi drilling https://www.oilcapital.com/companies/news/223489/block-energy-secures-equipment-for-next-phase-of-west-rustavi-drilling-223489.html Mon, 08 Jul 2019 07:23:00 +0100 https://www.oilcapital.com/companies/news/223485/anglo-african-oil--gas-to-assess-multiple-funding-options-in-competitive-process-223485.html Anglo African Oil & Gas to assess multiple funding options in competitive process https://www.oilcapital.com/companies/news/223485/anglo-african-oil--gas-to-assess-multiple-funding-options-in-competitive-process-223485.html Mon, 08 Jul 2019 07:12:00 +0100 https://www.oilcapital.com/companies/news/223487/bass-oil-completes-tangai-and-bunian-1-repairs-bunian-5-development-to-double-tangai-production-223487.html Bass Oil completes Tangai and Bunian 1 repairs, Bunian 5 development to double Tangai production https://www.oilcapital.com/companies/news/223487/bass-oil-completes-tangai-and-bunian-1-repairs-bunian-5-development-to-double-tangai-production-223487.html Mon, 08 Jul 2019 07:09:00 +0100 https://www.oilcapital.com/companies/news/223482/active-energy-raises-344mln-through-a-loan-note-issue-223482.html Active Energy raises £3.44mln through a loan note issue https://www.oilcapital.com/companies/news/223482/active-energy-raises-344mln-through-a-loan-note-issue-223482.html Mon, 08 Jul 2019 07:02:00 +0100 https://www.oilcapital.com/companies/news/223480/sdx-energy-looks-forward-to-south-disouq-start-up-as-development-continues-on-schedule-223480.html SDX Energy looks forward to South Disouq start up as development continues on schedule https://www.oilcapital.com/companies/news/223480/sdx-energy-looks-forward-to-south-disouq-start-up-as-development-continues-on-schedule-223480.html Mon, 08 Jul 2019 06:56:00 +0100 https://www.oilcapital.com/companies/news/223474/carnarvon-petroleum-continues-with-roc-south-1-well-to-test-deeper-targets-223474.html Carnarvon Petroleum continues with Roc South-1 well to test deeper targets https://www.oilcapital.com/companies/news/223474/carnarvon-petroleum-continues-with-roc-south-1-well-to-test-deeper-targets-223474.html Mon, 08 Jul 2019 06:31:00 +0100 https://www.oilcapital.com/companies/news/223490/providence-resourcess-wait-on-joint-venture-funds-nears-conclusion-223490.html Providence Resources’s wait on joint venture funds nears conclusion https://www.oilcapital.com/companies/news/223490/providence-resourcess-wait-on-joint-venture-funds-nears-conclusion-223490.html Mon, 08 Jul 2019 06:24:00 +0100 https://www.oilcapital.com/companies/news/223455/brookside-energy-executes-active-acreage-revaluation-strategy-in-prolific-us-basin-223455.html Brookside Energy executes active acreage revaluation strategy in prolific US basin https://www.oilcapital.com/companies/news/223455/brookside-energy-executes-active-acreage-revaluation-strategy-in-prolific-us-basin-223455.html Mon, 08 Jul 2019 01:55:00 +0100 https://www.oilcapital.com/companies/news/223443/hillcrest-petroleum-ltd-makes-progress-at-west-hazel-oil-project-closes-new-financing-223443.html Hillcrest Petroleum Ltd makes progress at West Hazel oil project, closes new financing https://www.oilcapital.com/companies/news/223443/hillcrest-petroleum-ltd-makes-progress-at-west-hazel-oil-project-closes-new-financing-223443.html Fri, 05 Jul 2019 17:00:00 +0100 https://www.oilcapital.com/companies/news/223432/europa-oil--gas-surges-as-irish-governments-decides-not-to-ban-offshore-exploration-223432.html Europa Oil & Gas surges as Irish government’s decides not to ban offshore exploration https://www.oilcapital.com/companies/news/223432/europa-oil--gas-surges-as-irish-governments-decides-not-to-ban-offshore-exploration-223432.html Fri, 05 Jul 2019 13:38:00 +0100 https://www.oilcapital.com/companies/news/223426/victoria-oil--gas-receives-us800000-payment-from-eneo-updates-on-second-quarter-production-223426.html Victoria Oil & Gas receives US$800,000 payment from ENEO, updates on second quarter production https://www.oilcapital.com/companies/news/223426/victoria-oil--gas-receives-us800000-payment-from-eneo-updates-on-second-quarter-production-223426.html Fri, 05 Jul 2019 12:29:00 +0100 https://www.oilcapital.com/companies/news/223421/wood-group-flows-higher-as-berenberg-lifts-it-up-to-buy-223421.html Wood Group flows higher as Berenberg lifts it up to ‘buy’ https://www.oilcapital.com/companies/news/223421/wood-group-flows-higher-as-berenberg-lifts-it-up-to-buy-223421.html Fri, 05 Jul 2019 11:55:00 +0100 https://www.oilcapital.com/companies/news/223416/eco-atlantic-oil--gas-kicks-off-guyana-exploration-well-223416.html Eco Atlantic Oil & Gas kicks off Guyana exploration well https://www.oilcapital.com/companies/news/223416/eco-atlantic-oil--gas-kicks-off-guyana-exploration-well-223416.html Fri, 05 Jul 2019 08:24:00 +0100 https://www.oilcapital.com/companies/news/223387/bass-oil-raising-up-to-3-million-for-development-drilling-at-indonesian-onshore-oilfield-223387.html Bass Oil raising up to $3 million for development drilling at Indonesian onshore oilfield https://www.oilcapital.com/companies/news/223387/bass-oil-raising-up-to-3-million-for-development-drilling-at-indonesian-onshore-oilfield-223387.html Fri, 05 Jul 2019 04:00:00 +0100 https://www.oilcapital.com/companies/news/223379/brookside-energy-builds-on-land-and-leasing-model-in-world-class-anadarko-basin-223379.html Brookside Energy builds on land and leasing model in world-class Anadarko Basin https://www.oilcapital.com/companies/news/223379/brookside-energy-builds-on-land-and-leasing-model-in-world-class-anadarko-basin-223379.html Fri, 05 Jul 2019 00:16:00 +0100 https://www.oilcapital.com/companies/news/223365/point-loma-resources-expects-first-farm-out-well-at-wizard-lake-to-spud-this-month-223365.html Point Loma Resources expects first farm-out well at Wizard Lake to spud this month https://www.oilcapital.com/companies/news/223365/point-loma-resources-expects-first-farm-out-well-at-wizard-lake-to-spud-this-month-223365.html Thu, 04 Jul 2019 14:33:00 +0100 https://www.oilcapital.com/companies/news/223367/curzon-energy-agrees-to-issue-secured-loan-notes-to-high-net-worth-investors-223367.html Curzon Energy agrees to issue secured loan notes to high net worth investors https://www.oilcapital.com/companies/news/223367/curzon-energy-agrees-to-issue-secured-loan-notes-to-high-net-worth-investors-223367.html Thu, 04 Jul 2019 13:34:00 +0100 https://www.oilcapital.com/companies/news/223353/igas-energy-unveils-plans-to-drill-two-new-wells-in-the-weald-basin-in-surrey-223353.html IGas Energy unveils plans to drill two new wells in the Weald Basin in Surrey https://www.oilcapital.com/companies/news/223353/igas-energy-unveils-plans-to-drill-two-new-wells-in-the-weald-basin-in-surrey-223353.html Thu, 04 Jul 2019 09:01:00 +0100 https://www.oilcapital.com/columns/vsa-capital-market-movers/31040/vsa-capital-market-movers---dekeoil-31040.html VSA CAPITAL MARKET MOVERS - DekeOil https://www.oilcapital.com/columns/vsa-capital-market-movers/31040/vsa-capital-market-movers---dekeoil-31040.html Thu, 04 Jul 2019 08:49:00 +0100

VSA Morning Agri Comment, 04/07/19

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DekelOil# - H1 2019 Production Update

Côte d'Ivoire agricultural company DekelOil Public Limited (DKL LN)# has announced a production update for H1 2019.

  • Fresh Fruit Bunches (FFB) Collected: 131,917t, +37% YoY (H1 2018: 96,195t)
  • Crude Palm Oil (CPO) Production: 28,934t, +30% YoY (H1 2018: 22,242t)
  • CPO Sales: 26,702t, +20% YoY (H1 2018: 22,271t)
  • Average CPO Selling Price: €505/t, -8% YoY (H1 2018: €549/t)

VSA Comment

Following a difficult FY 2018, DKL’s production levels in H1 2019 have recovered significantly. In fact, H1 2019 was a record in terms of CPO production and FFB collection at the mill, surpassing H1 2016’s 123,157t of FFB collected and 28,550t of CPO produced. It is also worth noting that YoY production growth rates accelerated considerably in Q2, highlighting the exceptional nature of the lower peak season yields last year (FFB production - Q1 2019: +17% YoY; Q2 2019: +71% YoY, CPO production - Q1 2019: +10% YoY; Q2 2019: +62% YoY).

During the period DKL continued its strategy of buying external palm kernels for processing to more fully utilise its kernel crushing facility. This allowed the production of almost 1,900t of palm kernel oil and 2,525t of palm kernel cake during the period. Unfortunately, as with the CPO price, PKO pricing remains depressed, recording a YoY decrease of 34% in H1 to €589/t. The premium of the PKO price over the CPO price has now shrunk from more than 40% in each of the past three years to just 17% in H1 2019.

Despite a recorded average selling price for CPO in H1 of €505/t, -8% YoY, DKL did manage to achieve a premium over the European CPO price of 9.4% in Q1 and 6.5% in Q2, demonstrating the strength of demand for CPO in the country. Unfortunately, global CPO prices have remained lower than we were hoping for this year with potential planting delays for the US soybean crop, increasing domestic consumption in South East Asia, and a widening soybean oil/CPO price premium, providing a degree of bullish support amid a myriad of more bearish factors lead by the US/China trade war.   

Looking forward, there is improvement clearly to be had in terms of DKL’s CPO extraction rate, which increased slightly in Q2 to 22.0% from 21.85% in Q1 but remains below its average extraction rate since inception of 22.7%. The company also has a significant number of kernels to be processed and CPO stock of 3,000t, which should boost its results in the upcoming low season.

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

Devro

369.65

221.50

9.50

+4.5%

Camellia

292.77

10,600.00

400.00

+3.9%

Avon Rubber

419.45

1,384.00

34.00

+2.5%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Kropz

 

16.00

(2.00)

-11.1%

Agriterra

1.34

6.33

(0.48)

-7.0%

Origin Enterprises

576.26

458.88

(18.72)

-3.9%

 

 

 

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https://www.oilcapital.com/companies/news/223351/energean-oil--gas-snaps-up-mediterranean-gas-portfolio-from-edison-for-us750mln-223351.html Energean Oil & Gas snaps up Mediterranean gas portfolio from Edison for US$750mln https://www.oilcapital.com/companies/news/223351/energean-oil--gas-snaps-up-mediterranean-gas-portfolio-from-edison-for-us750mln-223351.html Thu, 04 Jul 2019 08:18:00 +0100 https://www.oilcapital.com/companies/news/223318/carnarvon-petroleum-has-results-pending-from-roc-south-1-exploration-well-223318.html Carnarvon Petroleum has results pending from Roc South-1 exploration well https://www.oilcapital.com/companies/news/223318/carnarvon-petroleum-has-results-pending-from-roc-south-1-exploration-well-223318.html Thu, 04 Jul 2019 03:29:00 +0100 https://www.oilcapital.com/companies/news/223312/global-energy-ventures-appoints-country-associate-to-support-cng-strategy-in-brazil-223312.html Global Energy Ventures appoints country associate to support CNG strategy in Brazil https://www.oilcapital.com/companies/news/223312/global-energy-ventures-appoints-country-associate-to-support-cng-strategy-in-brazil-223312.html Thu, 04 Jul 2019 01:33:00 +0100 https://www.oilcapital.com/companies/news/223298/cadogan-petroleum-applies-for-20-year-production-licence-at-monastyretska-223298.html Cadogan Petroleum applies for 20-year production licence at Monastyretska https://www.oilcapital.com/companies/news/223298/cadogan-petroleum-applies-for-20-year-production-licence-at-monastyretska-223298.html Wed, 03 Jul 2019 14:26:00 +0100 https://www.oilcapital.com/companies/news/223256/anglo-african-oil--gas-drums-up-cash-to-access--potentially-prolific--layer-223256.html Anglo African Oil & Gas drums up cash to access 'potentially prolific' layer https://www.oilcapital.com/companies/news/223256/anglo-african-oil--gas-drums-up-cash-to-access--potentially-prolific--layer-223256.html Wed, 03 Jul 2019 13:15:00 +0100 https://www.oilcapital.com/companies/news/223273/morgan-stanley-mixed-on-oil-services-firms-ups-wood-group-to-overweight-cuts-petrofac-to-equal-weight-223273.html Morgan Stanley mixed on oil services firms; ups Wood Group to ‘overweight’, cuts Petrofac to ‘equal weight’ https://www.oilcapital.com/companies/news/223273/morgan-stanley-mixed-on-oil-services-firms-ups-wood-group-to-overweight-cuts-petrofac-to-equal-weight-223273.html Wed, 03 Jul 2019 10:39:00 +0100 https://www.oilcapital.com/companies/news/223262/us-oil--gas-raises-just-shy-of-us580000-to-fund-drilling-operations-223262.html US Oil & Gas raises just shy of US$580,000 to fund drilling operations https://www.oilcapital.com/companies/news/223262/us-oil--gas-raises-just-shy-of-us580000-to-fund-drilling-operations-223262.html Wed, 03 Jul 2019 07:17:00 +0100 https://www.oilcapital.com/companies/news/223239/global-energy-ventures-selects-cng-optimum-200-ship-construction-partner-223239.html Global Energy Ventures selects CNG Optimum 200 ship construction partner https://www.oilcapital.com/companies/news/223239/global-energy-ventures-selects-cng-optimum-200-ship-construction-partner-223239.html Wed, 03 Jul 2019 00:10:00 +0100 https://www.oilcapital.com/companies/news/223226/heres-why-new-york-citys-climate-emergency-resolution-is-a-step-in-the-right-direction-223226.html Here’s why New York City’s climate emergency resolution is a step in the right direction https://www.oilcapital.com/companies/news/223226/heres-why-new-york-citys-climate-emergency-resolution-is-a-step-in-the-right-direction-223226.html Tue, 02 Jul 2019 18:40:00 +0100 https://www.oilcapital.com/companies/news/223154/point-loma-eyes-a-potential-game-changer-as-the-oiler-advances-large-asset-base-in-alberta-223154.html Point Loma eyes a potential game-changer as the oiler advances large asset base in Alberta https://www.oilcapital.com/companies/news/223154/point-loma-eyes-a-potential-game-changer-as-the-oiler-advances-large-asset-base-in-alberta-223154.html Tue, 02 Jul 2019 16:27:00 +0100 https://www.oilcapital.com/companies/stocktube/13950/block-energy-ceo-on-oil-storage-deal-and-upcoming-work-programme-13950.html Block Energy CEO on oil storage deal and upcoming work programme https://www.oilcapital.com/companies/stocktube/13950/block-energy-ceo-on-oil-storage-deal-and-upcoming-work-programme-13950.html Tue, 02 Jul 2019 11:52:00 +0100 Block Energy PLC (LON:BLOE) CEO Paul Haywood spoke to Proactive London's Andrew Scott soon after announcing a substantial oil storage leasing agreement they've negotiated that will enable them to re-start production from its West Rustavi field in Georgia.

The agreement gives Block access to 90,000 barrels of storage capacity just 30km away at state oil group GOGC's main facility near Sartichala.

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https://www.oilcapital.com/companies/news/223193/i3-energy-awards-liberator-drilling-contracts-to-oilfield-services-giant-baker-hughes-ge-223193.html i3 Energy awards Liberator drilling contracts to oilfield services giant Baker Hughes GE https://www.oilcapital.com/companies/news/223193/i3-energy-awards-liberator-drilling-contracts-to-oilfield-services-giant-baker-hughes-ge-223193.html Tue, 02 Jul 2019 08:10:00 +0100 https://www.oilcapital.com/companies/news/223162/carnarvon-petroleum-at-4113-metres-depth-with-roc-south-1-oil--gas-exploration-well-223162.html Carnarvon Petroleum at 4,113 metres depth with Roc South-1 oil & gas exploration well https://www.oilcapital.com/companies/news/223162/carnarvon-petroleum-at-4113-metres-depth-with-roc-south-1-oil--gas-exploration-well-223162.html Tue, 02 Jul 2019 02:45:00 +0100 https://www.oilcapital.com/companies/news/223157/whitebark-energys-rex-1-oil-discovery-well-continues-to-improve-223157.html Whitebark Energy’s Rex-1 oil discovery well continues to improve https://www.oilcapital.com/companies/news/223157/whitebark-energys-rex-1-oil-discovery-well-continues-to-improve-223157.html Mon, 01 Jul 2019 23:30:00 +0100 https://www.oilcapital.com/companies/news/223151/capstone-turbine-scores-long-term-rental-deal-with-oil-and-gas-exploration-company-in-alaska-223151.html Capstone Turbine scores long-term rental deal with oil and gas exploration company in Alaska https://www.oilcapital.com/companies/news/223151/capstone-turbine-scores-long-term-rental-deal-with-oil-and-gas-exploration-company-in-alaska-223151.html Mon, 01 Jul 2019 14:27:00 +0100 https://www.oilcapital.com/companies/news/223111/block-energy-to-ramp-up-georgia-production-after-oil-storage-capacity-deal-223111.html Block Energy to ramp up Georgia production after oil storage capacity deal https://www.oilcapital.com/companies/news/223111/block-energy-to-ramp-up-georgia-production-after-oil-storage-capacity-deal-223111.html Mon, 01 Jul 2019 12:45:00 +0100 https://www.oilcapital.com/companies/news/223102/mosman-oil--gas-sells-off-lossmaking-strawn-oilfield-223102.html Mosman Oil & Gas sells off lossmaking Strawn oilfield https://www.oilcapital.com/companies/news/223102/mosman-oil--gas-sells-off-lossmaking-strawn-oilfield-223102.html Mon, 01 Jul 2019 12:05:00 +0100 https://www.oilcapital.com/companies/news/223106/hurricane-energy-to-move-onto-lincoln-crestal-well-after-warwick-deep-disappointment-223106.html Hurricane Energy to move onto Lincoln Crestal well after Warwick Deep disappointment https://www.oilcapital.com/companies/news/223106/hurricane-energy-to-move-onto-lincoln-crestal-well-after-warwick-deep-disappointment-223106.html Mon, 01 Jul 2019 11:25:00 +0100 https://www.oilcapital.com/companies/news/220874/solo-oil-sets-sights-on-5000-barrels-per-day-through-acquisition-drive-220874.html Solo Oil sets sights on 5,000 barrels per day through acquisition drive https://www.oilcapital.com/companies/news/220874/solo-oil-sets-sights-on-5000-barrels-per-day-through-acquisition-drive-220874.html Mon, 01 Jul 2019 11:01:00 +0100 https://www.oilcapital.com/columns/vsa-capital-market-movers/31030/vsa-capital-market-movers---bacanora-lithium-31030.html VSA CAPITAL MARKET MOVERS - Bacanora Lithium https://www.oilcapital.com/columns/vsa-capital-market-movers/31030/vsa-capital-market-movers---bacanora-lithium-31030.html Mon, 01 Jul 2019 10:57:00 +0100

VSA Morning Miner, 01/07/19

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Bacanora Lithium (LON:BCN)

Bacanora Lithium (BCN LN) announced late on Friday that it had signed an Investment Agreement and Offtake Agreement with Ganfeng Lithium in line with the terms previously announced. The agreement remains subject to final government approval in China, however, we believe that given Ganfeng’s previous track record in executing overseas transactions that there is only limited risk that this would now not be approved. Timing for completion is guided to the end of July 2019 and will mark a major step forward for BCN in terms of derisking the project financing.

As we have stated previously Ganfeng’s expertise in lithium processing and production as well as position as an industry leader provides significant advantages for BCN. We believe that Ganfeng’s contribution to EPC finalisation as well as access to Chinese equipment manufacturers could result in reduced capex for the Sonora project, from an initial US$420m, whilst the input of a dedicated team into the project and plant commissioning process further decreases the execution risk of ramp up beyond the already substantial benefit of the pilot plant.

The terms of the initial agreement are that Ganfeng will take a 29.99% stake  for £14.4m (US$18.2m) in BCN alongside a project level investment of 22.5% for £7.6m (US$9.6m). Ganfeng will have the right to appoint one director to each of BCN and the project level company with the option to increase its project level interest to 50% within 24 months based on market pricing. Ganfeng will also have offtake rights to 50% of stage one lithium production and up to 75% of stage two lithium production. Capacity for stage one and two is 17.5ktpa and 35ktpa of lithium carbonate respectively.

Ganfeng has indicated that it intends to cornerstone the project financing after this initial agreement and we believe that the combination of technical and financial support should give investors significant comfort over project financing and commissioning. The shares have now close to doubled since our initiation and we believe that Ganfeng have been attracted to the Sonora project’s key fundamentals of low operating costs and the genuine capability to produce battery grade lithium rapidly and consistently.

We reiterate our Buy recommendation and 114p target price.   


Oliver O'Donnell, CFA, Natural Resources & China | T: +44 (0)20 3617 5180 | E: oodonnell@vsacapital.com
Paul Renken, Geologist | T: +44 (0)20 3005 5011 | E: prenken@vsacapital.com

VSA Capital Research | T: +44 (0)20 3005 5000 | E: research@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/223133/lekoil-gushes-as-otakikpo-jv-signs-mou-with-schlumberger-and-major-oiler-223133.html Lekoil gushes as Otakikpo JV signs MOU with Schlumberger and major oiler https://www.oilcapital.com/companies/news/223133/lekoil-gushes-as-otakikpo-jv-signs-mou-with-schlumberger-and-major-oiler-223133.html Mon, 01 Jul 2019 10:41:00 +0100 https://www.oilcapital.com/companies/stocktube/13930/g3-exploration-s-grewal-updates-on-demerger-of-green-dragon-gas-13930.html G3 Exploration's Grewal updates on demerger of Green Dragon Gas https://www.oilcapital.com/companies/stocktube/13930/g3-exploration-s-grewal-updates-on-demerger-of-green-dragon-gas-13930.html Mon, 01 Jul 2019 10:17:00 +0100 G3 Exploration Ltd's (LON:G3E) Randeep Grewal tells Proactive London they remain committed to concluding the demerger of Green Dragon Gas.

G3 Exploration shareholders on the register as of the effective date 29 March will receive a direct interest in Green Dragon Gas, the G3 subsidiary that holds the group’s producing assets.

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https://www.oilcapital.com/companies/news/213735/mosman-oil-and-gas-lines-up-next-drilling-projects-as-producing-portfolio-builds-213735.html Mosman Oil and Gas lines up next drilling projects as producing portfolio builds https://www.oilcapital.com/companies/news/213735/mosman-oil-and-gas-lines-up-next-drilling-projects-as-producing-portfolio-builds-213735.html Mon, 01 Jul 2019 09:22:00 +0100 https://www.oilcapital.com/companies/stocktube/13928/union-jack-s-david-bramhill-welcomes-strong-show-of-support-for-225mln-raise-13928.html Union Jack's David Bramhill welcomes strong show of support for £2.25mln raise https://www.oilcapital.com/companies/stocktube/13928/union-jack-s-david-bramhill-welcomes-strong-show-of-support-for-225mln-raise-13928.html Mon, 01 Jul 2019 09:10:00 +0100 Union Jack Oil PLC's (LON:UJO) David Bramhill spoke to Proactive London's Andrew Scott soon after announcing they'd raised £2.25mln as the firm works to follow up the West Newton appraisal success with an extended well test.

Bramhill says he's looking forward to the results of the planned extended well test in the third quarter of 2019 that will be expanded to test the liquid and/or gas intervals evident in the well.

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https://www.oilcapital.com/companies/news/223128/solo-oil-to-intensify-efforts-to-divest-ruvuma-stake-as-part-of-re-boot-strategy-223128.html Solo Oil to intensify efforts to divest Ruvuma stake as part of re-boot strategy https://www.oilcapital.com/companies/news/223128/solo-oil-to-intensify-efforts-to-divest-ruvuma-stake-as-part-of-re-boot-strategy-223128.html Mon, 01 Jul 2019 08:31:00 +0100 https://www.oilcapital.com/companies/news/223115/ports-operator-dp-world-snaps-up-topaz-energy--marine-for-us11bn-223115.html Ports operator DP World snaps up Topaz Energy & Marine for US$1.1bn https://www.oilcapital.com/companies/news/223115/ports-operator-dp-world-snaps-up-topaz-energy--marine-for-us11bn-223115.html Mon, 01 Jul 2019 07:35:00 +0100 https://www.oilcapital.com/companies/news/223119/europa-oil--gas-expects-morocco-permit-to-be-awarded-shortly-223119.html Europa Oil & Gas expects Morocco permit to be awarded shortly https://www.oilcapital.com/companies/news/223119/europa-oil--gas-expects-morocco-permit-to-be-awarded-shortly-223119.html Mon, 01 Jul 2019 07:31:00 +0100 https://www.oilcapital.com/companies/news/223107/highlands-natural-resources-to-start-selling-cbd-in-the-uk-223107.html Highlands Natural Resources to start selling CBD in the UK https://www.oilcapital.com/companies/news/223107/highlands-natural-resources-to-start-selling-cbd-in-the-uk-223107.html Mon, 01 Jul 2019 07:01:00 +0100 https://www.oilcapital.com/companies/stocktube/13935/diversified-gas--oil-plc---proactive-s-oil-capital-conference-june-2019-13935.html Diversified Gas & Oil PLC - Proactive's Oil Capital Conference June 2019 https://www.oilcapital.com/companies/stocktube/13935/diversified-gas--oil-plc---proactive-s-oil-capital-conference-june-2019-13935.html Mon, 01 Jul 2019 06:59:00 +0100 Eric Williams, CFO at Diversified Gas & Oil PLC (LON:DGOC), speaks at the Proactive Investors Oil Capital Conference - June 2019.

For more information visit www.dgoc.com

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https://www.oilcapital.com/companies/stocktube/13934/anglo-african-oil--gas---proactive-s-oil-capital-conference-june-2019-13934.html Anglo African Oil & Gas - Proactive's Oil Capital Conference June 2019 https://www.oilcapital.com/companies/stocktube/13934/anglo-african-oil--gas---proactive-s-oil-capital-conference-june-2019-13934.html Mon, 01 Jul 2019 06:51:00 +0100 Anglo African Oil & Gas PLC's (LON:AAOG) David Sefton speaks at the Proactive Investors Oil Capital Conference - June 2019.

For more information visit www.aaog.com

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https://www.oilcapital.com/companies/stocktube/13933/i3-energy---proactive-s-oil-capital-conference-june-2019-13933.html i3 Energy - Proactive's Oil Capital Conference June 2019 https://www.oilcapital.com/companies/stocktube/13933/i3-energy---proactive-s-oil-capital-conference-june-2019-13933.html Mon, 01 Jul 2019 06:45:00 +0100 Majid Shafiq, chief executive of i3 Energy Plc (LON:i3E) speaks at the Proactive Investors Oil Capital Conference - June 2019.

For more information visit https://i3.energy.

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https://www.oilcapital.com/companies/stocktube/13932/premier-oil---proactive-s-oil-capital-conference-june-2019-13932.html Premier Oil - Proactive's Oil Capital Conference June 2019 https://www.oilcapital.com/companies/stocktube/13932/premier-oil---proactive-s-oil-capital-conference-june-2019-13932.html Mon, 01 Jul 2019 06:41:00 +0100 Elizabeth Brooks, head of investor relations at Premier Oil PLC (LON:PMO) speaks at the Proactive Investors Oil Capital Conference - June 2019.

For more information visit www.premier-oil.com.

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https://www.oilcapital.com/companies/stocktube/13936/po-valley-energy-limited---proactive-s-oil-capital-conference-june-2019-13936.html Po Valley Energy Limited - Proactive's Oil Capital Conference June 2019 https://www.oilcapital.com/companies/stocktube/13936/po-valley-energy-limited---proactive-s-oil-capital-conference-june-2019-13936.html Mon, 01 Jul 2019 06:10:00 +0100 Po Valley Energy Limited (ASX:PVE) chairman Michael Masterman speaks at the Proactive Investors Oil Capital Conference - June 2019.

For more information visit www.povalley.com

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https://www.oilcapital.com/companies/stocktube/13920/significant-board-changes-at-rose-petroleum-13920.html Significant board changes at Rose Petroleum https://www.oilcapital.com/companies/stocktube/13920/significant-board-changes-at-rose-petroleum-13920.html Fri, 28 Jun 2019 13:55:00 +0100 Rose Petroleum PLC (LON:ROSE) outgoing CEO Matthew Idiens and new boy on the block Colin Harrington talk to Proactive London about changes to the company's board. Idiens told investors of his intention to step down from his position last week saying he would stay until the company had completed its current transitional period.
Both Rose executives say that the company will continue to evaluate roles and needs at the executive and board levels. It appointed Rick Grant as non-executive director and Harrington explains how Grant was previously chief executive of Suez North America LNG and Suez Global LNG, earning him both the pedigree and experience he now intends to put to good use at Rose.

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https://www.oilcapital.com/companies/news/223040/anglo-african-oil--gas-continues-to-progress-tilapia-project-and-look-at-new-opportunities-223040.html Anglo African Oil & Gas continues to progress Tilapia project and look at new opportunities https://www.oilcapital.com/companies/news/223040/anglo-african-oil--gas-continues-to-progress-tilapia-project-and-look-at-new-opportunities-223040.html Fri, 28 Jun 2019 13:50:00 +0100 https://www.oilcapital.com/companies/news/223023/eqtec-raises-750000-from-placing-and-pays-down-debt-223023.html EQTEC raises £750,000 from placing and pays down debt https://www.oilcapital.com/companies/news/223023/eqtec-raises-750000-from-placing-and-pays-down-debt-223023.html Fri, 28 Jun 2019 13:44:00 +0100 https://www.oilcapital.com/companies/news/223055/ceres-power-shares-worth-300p-says-liberum-in-bullish-buy-note-223055.html Ceres Power shares worth 300p, says Liberum in bullish ‘buy’ note https://www.oilcapital.com/companies/news/223055/ceres-power-shares-worth-300p-says-liberum-in-bullish-buy-note-223055.html Fri, 28 Jun 2019 11:25:00 +0100 https://www.oilcapital.com/companies/news/223024/g3-exploration-to-press-on-with-hong-kong-listing-for-its-production-assets-223024.html G3 Exploration to press on with Hong Kong listing for its production assets https://www.oilcapital.com/companies/news/223024/g3-exploration-to-press-on-with-hong-kong-listing-for-its-production-assets-223024.html Fri, 28 Jun 2019 07:46:00 +0100 https://www.oilcapital.com/columns/vsa-capital-market-movers/31023/vsa-capital-market-movers---egdon-resources-31023.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/31023/vsa-capital-market-movers---egdon-resources-31023.html Thu, 27 Jun 2019 08:04:00 +0100

VSA Morning Flow Test, 27/06/19

Click here for PDF version

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

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Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced the much anticipated results of its Springs Road exploration well which was completed 20% under budget earlier this year. EDR holds a 14.5% interest while IGas (LON:IGAS) is the operator and we have previously highlighted the exploration well as a potential play opener given its central position within the Gainsborough Trough where EDR has a net 82,000 acres of shale exploration acreage. Today’s strong results confirm a major step towards realising that potential.

The vertical exploration well was drilled to a depth of 3,500m intercepting 429m of hydrocarbon bearing shales from the Bowland Shale, Millstone Grit and Arundian Shale. IGAS recovered 147m of core from the Bowland shale starting at c2,100m depth. This was the primary target for drilling and was analysed by Stratum Reservoir. The highlights of those results include:

  • Total Organic Carbon (TOC): 2-7% averaging 3%. Which compares to 2-8% in the Marcellus and a minimum of 2% in the Permian.
  • Average thermal maturity of 464°C.
  • Total porosity of 2-9% averaging 4% compared to 3-13% in the Marcellus and 2-10% in the Permian.
  • Gas content of 24-131scf/ton averaging 71scf/ton versus typical values of 40-150scf/t in the Marcellus. We also highlight that Cuadrilla’s Preston New Road yielded an average of 40scf/ton.
  • Average clay content of c.30 wt.%.

The low clay content means that hydraulic fracturing would likely be effective although this is likely to vary significantly across the reservoir. Higher clay content areas are more ductile and less likely to fracture when stimulated while lower clay content rocks which are more brittle enable to gas to flow more easily when fractured. Although the figure is an average it is lower than we had anticipated which we believe is a further positive.

We attach a high level of significance to the higher gas content compared to the Preston New Road development where Cuadrilla recently completed flow testing. Whilst with gas contents and porosity closely aligned to those of the major commercial shale basins of the US these results imply a major step forward in technically derisking the Gainsborough Trough and demonstrating that it the geological characteristics suitable for economic extraction.

The announcement indicates that IGAS and EDR will provide further detail in the coming quarter as well as providing more detailed comparative data on analogues. At this stage we have provided very high-level generalised statistics from the US which do not reflect the nuances within the basins mentioned, however, we believe that given the results the quality of the host rock within the Gainsborough Trough is clear, in our view.

We maintain that the UK will likely remain dependent on natural gas for a significant portion of its needs over the coming decades. This outlook is supported by the fact that natural gas is the cleanest hydrocarbon based fuel and represents a practical step towards lowering greenhouse gas emissions. Furthermore, the UK is currently reliant on imports for c50% of its gas needs and there is a clear benefit to exploiting domestic energy supplies. These strong results from Springs Road provide significant weight to the argument that the UK Government should re-evaluate its position and actively work to develop this industry.

Having recently completed an open offer which raised £1.9m on a net basis the company is in a strong position underpinned by a significant production uplift in 2019 driving a stronger revenue and earnings outlook YoY. With a strengthened balance sheet EDR is well placed to capitalise on the results from Springs Road as well as to continue to progress other key areas of its portfolio such as Resolution.

Our current target price of 39p is dominated by our shale acreage valuation which accounts for 27p of the total. The market has to date given little credit to this part of EDR’s portfolio, however, we believe that these latest results should drive a significant rerating of the stock particularly as our valuation of US$787/acre was based primarily on transactions for shale acreage which had only been modestly derisked. More advanced acreage typically trades closer to and in excess of US$2,000/acre. We note that EDR acquired much of its acreage for US$200/acre or less.

We reiterate our Buy recommendation and 39p target price.

 

 

 

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https://www.oilcapital.com/companies/stocktube/13875/mosman-oil--gas-pleased-with-stanley-progress-as-it-prepares-for-third-well-13875.html Mosman Oil & Gas pleased with Stanley progress as it prepares for third well https://www.oilcapital.com/companies/stocktube/13875/mosman-oil--gas-pleased-with-stanley-progress-as-it-prepares-for-third-well-13875.html Wed, 26 Jun 2019 09:35:00 +0100 Mosman Oil And Gas Ltd's (LON:MSMN) Andy Carroll tells Proactive London they're preparing to drill a third well at the Stanley project.

MSMN expects that the drill programme will start in the next 90 days.

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https://www.oilcapital.com/companies/stocktube/13884/chariot-oil--gas---proactive-s-oil-capital-conference-june-2019-13884.html Chariot Oil & Gas - Proactive's Oil Capital Conference June 2019 https://www.oilcapital.com/companies/stocktube/13884/chariot-oil--gas---proactive-s-oil-capital-conference-june-2019-13884.html Wed, 26 Jun 2019 07:27:00 +0100 Chariot Oil & Gas Limited’s (LON:CHAR) exploration manager Duncan Wallace and CFO Julian Maurice-Williams present at the Proactive Investors Oil Capital Conference in London.

For more information visit www.chariotoilandgas.com

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https://www.oilcapital.com/companies/stocktube/13883/mosman-oil--gas---proactive-s-oil-capital-conference-june-2019-13883.html Mosman Oil & Gas - Proactive's Oil Capital Conference June 2019 https://www.oilcapital.com/companies/stocktube/13883/mosman-oil--gas---proactive-s-oil-capital-conference-june-2019-13883.html Wed, 26 Jun 2019 07:17:00 +0100 Mosman Oil And Gas Ltd's (LON:MSMN) Andy Carroll presents at the Proactive Investors Oil Capital Conference in London.

For more information visit www.mosmanoilandgas.com

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https://www.oilcapital.com/companies/stocktube/13832/petrofac-brings--scale-capability-and-credibility--to-nu-oil-s-gas-to-wire-venture-13832.html Petrofac brings 'scale, capability and credibility' to Nu-Oil's gas-to-wire venture https://www.oilcapital.com/companies/stocktube/13832/petrofac-brings--scale-capability-and-credibility--to-nu-oil-s-gas-to-wire-venture-13832.html Fri, 21 Jun 2019 10:04:00 +0100 Alison Pegram, Nu-Oil and Gas Plc (LON:NUOG) and MFDevCo managing director, discusses with Proactive London's Andrew Scott their partnership with energy industry engineering group Petrofac Limited (LON:PFC).

Together MFDevCo ( NUOG's 50% owned joint venture Company ) and Petrofac will collaborate in gas-to-wire opportunities aimed at opening up ‘stranded’ gas resources.

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https://www.oilcapital.com/companies/stocktube/13796/quadrise-fuels--mike-kirk-details-agreement-to-fast-track-msar-projects-in-mexico-13796.html Quadrise Fuels' Mike Kirk details agreement to fast-track MSAR projects in Mexico https://www.oilcapital.com/companies/stocktube/13796/quadrise-fuels--mike-kirk-details-agreement-to-fast-track-msar-projects-in-mexico-13796.html Wed, 19 Jun 2019 08:52:00 +0100 Quadrise Fuels International PLC's (LON:QFI) chief executive Mike Kirk  speaks to Proactive London after signing an agency agreement with industrial infrastructure firm Redliner to fast-track projects for its MSAR synthetic fuel technology in Mexico.

Kirk also talks through a services agreement they've signed with Aleph Commodities Ltd which will provide services to the company in the Kingdom of Saudi Arabia (KSA).

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https://www.oilcapital.com/companies/stocktube/13784/touchstone-exploration-ready-to-spud-first-well-on-ortoire-block-13784.html Touchstone Exploration ready to spud first well on Ortoire block https://www.oilcapital.com/companies/stocktube/13784/touchstone-exploration-ready-to-spud-first-well-on-ortoire-block-13784.html Tue, 18 Jun 2019 15:01:00 +0100 Touchstone Exploration Inc's (LON:TXP) Paul Baay tells Proactive London's Andrew Scott they're ready to spud their first well on the Ortoire project.

''The only hold up at this point is when we'll get the drilling rig - one of the other operators on the island is using it right now - as soon as they're done it'll move into our location''.

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https://www.oilcapital.com/companies/stocktube/13779/development-of-chariot-oil--gas-s-anchois-gas-field--very-feasible--13779.html Development of Chariot Oil & Gas's Anchois gas field 'very feasible' https://www.oilcapital.com/companies/stocktube/13779/development-of-chariot-oil--gas-s-anchois-gas-field--very-feasible--13779.html Tue, 18 Jun 2019 09:57:00 +0100 Chariot Oil & Gas Limited’s (LON:CHAR) CFO Julian Maurice-Williams tells Proactive London's Andrew Scott that recent studies carried out on its Anchois gas field, offshore Morocco, have shown that development of the project is technically feasible.

Chariot believes there's potential for either a single phase or a staged development to commercially optimise access to different parts of the gas market.

The firm's also carried out an assessment of the Moroccan energy market as well as confirming it's initiated an Environmental Impact Assessment which will allow it to carry out appraisal operations in 2020.

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https://www.oilcapital.com/companies/stocktube/13760/tlou-energy--finalising-project-agreements--after-tender-approval-for-cbm-project-13760.html Tlou Energy 'finalising project agreements' after tender approval for CBM project https://www.oilcapital.com/companies/stocktube/13760/tlou-energy--finalising-project-agreements--after-tender-approval-for-cbm-project-13760.html Mon, 17 Jun 2019 12:45:00 +0100 Tlou Energy Ltd's (LON:TLOU) Tony Gilby caught up with Proactive's Andrew Scott while in London.

Tlou's working with the Botswana government to finalise all the project agreements after being approved as the ‘preferred bidder’ for a coal bed methane fired power project.

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https://www.oilcapital.com/companies/stocktube/13759/anglo-african-oil--gas-approaching-key-milestones-at-tilapia-13759.html Anglo African Oil & Gas approaching key milestones at Tilapia https://www.oilcapital.com/companies/stocktube/13759/anglo-african-oil--gas-approaching-key-milestones-at-tilapia-13759.html Mon, 17 Jun 2019 12:29:00 +0100 Anglo African Oil & Gas PLC's (LON:AAOG) executive chairman David Sefton updates Proactive London's Andrew Scott on recent developments with their TLP-103C well, at the Tilapia field in the Republic of the Congo.

AAOG's currently developing a plan to produce from the Djeno reservoir through a re-entry of the well.

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https://www.oilcapital.com/companies/stocktube/13756/union-jack-s-david-bramhill--over-the-moon--with-significant-west-newton-result-13756.html Union Jack's David Bramhill 'over the moon' with significant West Newton result https://www.oilcapital.com/companies/stocktube/13756/union-jack-s-david-bramhill--over-the-moon--with-significant-west-newton-result-13756.html Mon, 17 Jun 2019 08:13:00 +0100 Union Jack Oil PLC's (LON:UJO) David Bramhill speaks to Proactive London's Andrew Scott after revealing what could be a potentially transformational result as the West Newton appraisal well confirmed a substantial hydrocarbon accumulation.

The West Newton A-2 conventional appraisal well, located in east Yorkshire, encountered a 65 metre (net) interval in the Kirkham Abbey formation which was its main target.

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https://www.oilcapital.com/companies/stocktube/13701/high-peak-royalties-leverages-1-interest-in-prospective-gas-and-helium-hydrocarbon-discovery-13701.html High Peak Royalties leverages 1% interest in prospective gas and helium hydrocarbon discovery https://www.oilcapital.com/companies/stocktube/13701/high-peak-royalties-leverages-1-interest-in-prospective-gas-and-helium-hydrocarbon-discovery-13701.html Wed, 12 Jun 2019 04:13:00 +0100 High Peak Royalties Ltd (ASX:HPR) chairman Andy Carroll updates Proactive Investors about the company's 1% royalty interest in Santos' permits in the Northern Territory's Amadeus basin, where there is potential for a large gas hydrocarbon discovery.
 
"This is a very large prospect and very exciting," says Carroll. 
 
He continues, "Santos have identified a salt seal which works great around the world and seals not only hydrocarbons but also helium - the world is running out of helium so helium is worth significantly more than hydrocarbons and has been seen in wells drilled in this area.
 
"This has the potential for a very large gas hydrocarbon discovery but also for a very large helium resource - our 1% royalty over the whole area is a really great position to be in."
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https://www.oilcapital.com/columns/the-pay-zone/30985/oil-price-amerisur-far-limited-infrastrata-and-finally-30985.html Oil price, Amerisur, Far Limited, Infrastrata And finally… https://www.oilcapital.com/columns/the-pay-zone/30985/oil-price-amerisur-far-limited-infrastrata-and-finally-30985.html Tue, 11 Jun 2019 09:03:00 +0100

WTI $53.26 -73c, Brent $62.29 -$1.00, Diff -$9.03 -27c, NG $2.36 +2c

Oil price

Yet again it was the trade talks bogey that scotched the oil price yesterday after President Trump returned from his golfing holiday in Ireland to take another broadside at China. Some analysts worried about oil inbound to Chinese refiners but I don’t see that as a problem over the long term, demand will still be high they are just buying less US crude oil.

The retail gasoline market in the US which I monitor rather sadly has definitely gone over the top and interestingly as we start the driving season, this is because the refiners got greedy and have have runs at a historic high level and as a result we have seen product inventories rise and prices fall. The average US gallon is now $2.73 which is down 7.5c w/w and down 17.9c y/y.

Amerisur Resources

An update from AMER this morning which looks very positive but also alludes to more excitement to come. This is partly as the ANH has given formal approval to the Oxy farm-out which gives them 50%in four exploration blocks at a cost of $93m. This covers the exploration and appraisal programme for 2019-2021 including 2D and 3D seismic and 100% of a five well drilling programme. CEO John Wardle is clearly pleased to announce that work has already started on this programme.

Elsewhere, the Plat-26 infill well has been a success with the well producing 710 b/d from 46 feet of pay in the ‘U’ Sands, next stop is the sidetrack that is continuing on Plat-22. There is also good news in the production update which is currently at a perky 6,800 b/d bringing up the yearly average of 5,300 b/d. This includes the Plat-26 infill and CPO-5 production but not current exploration drilling.

At CPO-5 Sol-1 is at TD where logging operations are under way, after this the rig moves to drill the Indico-2 appraisal well so obviously not long to wait but no clues here. Amerisur is clearly firing on all cylinders and with third party crude through the OBA and the Oxy deal now starting to come into fruition the outlook is positive. A successful result at Sol would be good but appraisal of  the existing discovery at Indico is also very important whilst the drilling at Platanillo is clearly having very meaningful results. All in all the company is set fair and the share price, like a number of others looks way too cheap.

Far Limited

Following their recent AGM and the presentation by MD Cath Norman I took the opportunity to speak to the company especially as they have a busy couple of months coming up. It is worth taking a look at the presentation on the website as it goes into a great deal of detail about ongoing operational matters, at the AGM Peter Nicholls, Exploration Manager and Rolf Stork, Asset Manager The Gambia both expanded on Far’s activities in the last year and looked forward.

Starting with Senegal, a great deal of hard work has taken place recently and the company are on track for Final Investment Decision in 2H of this year with development drilling starting in 2021, first oil in Phase 1 of 100/- b/d expected in 2022 and possible gas in 2024. 2019 also sees the application to appraise the FAN, SNE North and Fan South discoveries and the 3D seismic acquisition is expected early in Q3. With 5bn barrels estimated in place the work has been very much on the go all the time, the FEED started in December 2018 and has now included the FPSO commencing with MODEC and the subsea underway with Subsea Integration Alliance.

Following a press article recently there has been a good deal of speculation about some partners farming-out all or part of their interests in the SNE field. Cairn have always had the intention to sell down pre-FID and now have a data room open and I understand that offers have to be in by mid-June. Whilst Far have had a data room open for the development funding process, they have not retained any investment bank, although should there be significant interest it is very much an option to sell a small stake in the process. Cairn appear to be using the Far, top end numbers in their offering which should, in my view, rerate upwards the overall value of the field. Given the highly popular nature of the West African coast in recent years I would imagine that all the usual suspects are either in the data room and either have or are at the latest stage of preparing, their bids.

To put all this into context Far has calculated that their net development financing costs are of the order of $411m of which 50% would ideally be covered by JV project financing. In a recent presentation the company detailed their remaining options as 1) a partial sell-down of equity, 2) Mezzanine finance or 3) a bond issue. Accordingly, it is possible that with significant demand they might just add something to the sale process, there would be restrictions on how much they could sell and it could depend on the appetite and how much Cairn sells. Far are clearly working on a number of different structures/options for the deal before they move into the execution of Phase 1 expected in three months.

At this stage it is worth briefly looking at the arbitration process which as always seems to go on ad infinitum. As I understand it the hearing is currently scheduled for the 8th-12th of July and Far appear as confident as possible and have a very good case. Note that I don’t see this as a difficult outcome given the indemnity agreement signed between COP and Woodside.

Moving on to The Gambia where the Samo-1 well was disappointingly dry although operated by Far highly efficiently and had many traces of hydrocarbons that gives serious hope for other prospects in the area. Mapping is continuing in the blocks Far has a good relationship with Petronas and the team is moving on with a great deal of local knowledge about as many as 5 prospects but Samo may have migrated and so Bambo might be the next target. Far believe they can intersect both Bambo and Soloo in one well to test both prospects. FAR is likely to move into the next licence term mid-year where they will have a commitment to drill one more well in either block A2 or A5 possibly in 1H 2020. Finally, on The Gambia there is the small matter of the remaining 20% which Erin Energy kept when it sold A2 and A5 to Far but since then Erin has filed for bankruptcy and negotiations continue but Far must remain confident that this stake will revert to them in due course.

Finally, Far have a 21.42% WI in the Sinapa and Esperanca blocks in Guinea-Bissau with Svenska Petroleum which I understand a major NOC is farming into the acreage. Far has held this for a long time and it seems that it is not at the top of the list of preferences to drill so if they could farm down their interest or even just the well that might appeal. With the area attracting all the majors of late, the news of a deal would not be a surprise.

Far is in a fascinating place at the moment, as documented above it is at a crucial time as part owner of a truly world class asset in Senegal where I expect the valuation to grow as the suitors line up for Cairn’s stake. Whilst Samo-1 was a disappointment you cannot write off frontier acreage on the back of one well and Petronas know that they have an interesting ticket in this potentially huge play, they will return next year again. Far is well funded and knows how to ensure that it will meet its share of the SNE development without any problem as far as I can see. They have supportive shareholders, one of the very best management teams in the industry and at 6c and a market cap of A$357m are a very attractive long term investment in an area where way bigger oil companies would like to be playing in their space.

Infrastrata

INFA has announced that it has signed a deal with Vitol as its exclusive off-take partner for its Islandmagee gas project for a 12 year period. Whilst there is still much work to be done readers will know that I am not surprised that Vitol have stepped up here in a deal that could be most exciting for both parties.

And finally…

History was nearly made last night as the Toronto Raptors went into game 5 of the NBA finals leading the Warriors 3-1 but in a tight game the GSW won 106-105 taking the score to 3-2 and still every chance for either side to win. Toronto however have home advantage next…

It’s the Guildford Festival and after yesterdays deluge I was building an Ark but today has dawned sunny if not tropical…

And best wishes to Tony Durrant and his team at Premier Oil who celebrate their 85th birthday today…

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https://www.oilcapital.com/companies/stocktube/13690/whitebark-energy-begins-commercial-oil-production-at-wizard-lake-project-in-canada-13690.html Whitebark Energy begins commercial oil production at Wizard Lake project in Canada https://www.oilcapital.com/companies/stocktube/13690/whitebark-energy-begins-commercial-oil-production-at-wizard-lake-project-in-canada-13690.html Mon, 10 Jun 2019 22:04:00 +0100 Whitebark Energy Ltd (ASX:WBE) managing director David Messina updates Proactive Investors on the company's Wizard Lake Project in Canada, where it has started first commercial oil production after constructing a pipeline and process facility.
 
Messina says that the first step was to bring the first well Rex-1 online, with plans to move very quickly onto Rex 2 and eventually Rex-3 in the coming months.
 
The company has been looking to boost its oil production and is pleased that the new oil pool will enable increased output with a ready market close by in Canada.
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https://www.oilcapital.com/columns/the-pay-zone/30981/oil-price-eco-atlantic-oil--gas-and-finally-30981.html Oil price, Eco (Atlantic) Oil & Gas And finally… https://www.oilcapital.com/columns/the-pay-zone/30981/oil-price-eco-atlantic-oil--gas-and-finally-30981.html Mon, 10 Jun 2019 10:51:00 +0100 WTI $53.99 +$1.40, Brent $63.29 +$1.62, Diff -$9.30 +22c, NG $2.34 +1c

Oil price

Markets and commodities turned at the end of last week, the irony was that a bad set of jobs data led to speculation about a Fed rate cut, ironic as President Trump had suggested that rate rises were inappropriate recently… Crude also jumped after it was revealed that the Mexico tariff war had been averted whilst at the SPIEF in St Petersburg the Saudis and the Russians got together to agree to existing cuts would be continued. Indeed whether the Opec+ meeting comes before or after the G20 it looks like it is merely a formality.

Brent fell $1.20 on the week whilst WTI actually nailed a 49c rise, the rig count on Friday saw overall rig numbers fall by 9 to 975 but oil came down by 11 to 789.

Eco (Atlantic) Oil & Gas 

Eco this morning announced the mobilisation of the Stena Forth drillship en route to the Orinduik block offshore Guyana. It is expected to reach the block on the 24th of June and to spud the Jethro Lobe prospect around the 26th. After that well the company plan to drill the Joe prospect a few kilometres away.

With $35m of cash following the raise in April the company is fully funded for up to a further six potential exploration or development wells. Both these upcoming wells will test the Upper and Lower tertiary aged turbidites and Jethro will also drill down to the Cretaceous section. With Exxon having discovered over 5.5bn boe on the adjacent Stabroek block with 13 discovery wells expectations are high that it will have de-risked the play but  Eco warn that they still carry risks of the quality of the seal and the presence of a trap. With around 4bn barrels of prospective resources any success would knock the £141m market cap into next week.

And finally…

In Canada the GP was won by Lewis Hamilton who actually crossed the line second but Vettel took a five second penalty for dangerous driving which put him second overall, might have been third but for team orders…..

The CWC has seen England beat Bangladesh, New Zealand beat Afghanistan and I was at The Oval yesterday to see India beat the Aussies. The weather is hardly ‘flaming June’ which has already affected the Windies v South Africa this morning.

And England beat Scotland 2-1 in yesterday’s WWC in Nice…

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https://www.oilcapital.com/columns/the-pay-zone/30977/oil-price-anglo-african-pantheon-reabold-upland-united-sound-energy-and-finally-30977.html Oil price, Anglo African, Pantheon, Reabold, Upland, United, Sound Energy And finally… https://www.oilcapital.com/columns/the-pay-zone/30977/oil-price-anglo-african-pantheon-reabold-upland-united-sound-energy-and-finally-30977.html Fri, 07 Jun 2019 11:34:00 +0100 WTI $52.59 +91c, Brent $61.67 +$1.04, Diff -$9.08 +13c, NG $2.32 -5c

Oil price

Was yesterday’s rally one of relief, technical or of the dead cat bounce variety? With the Mexican tariffs due to start on Monday markets were relived to hear that talks between the two sides had resumed and there may be a delay although I personally wouldn’t hold my breath. Technical certainly but with no degree of evidence that the charts are showing us much as the moment, dead cat is also high on the list of chances.

Actually what moved the price yesterday was that for the second day running the Saudis and the Russians held tight to the party line of production restrictions. Whether that continues through the July Opec+ meeting still remains to be seen but at the moment it proves that the market is swaying to the tune of the tariff man and global economic fears and not the imminent shortage of supply from Opec. Finally it is the SPIEF Forum in St Petersburg and taking a quick look at the attendees all the usual bums are on seats ready for a bit of grovelling between lectures…

Anglo African Oil & Gas

The company today announce that the Tilapia CPR has been ‘paused’ while further data is acquired but disappointingly it seems that Senergy has stopped on the work. In the meantime the company is replacing it with a CPI from another provider and also running with the Schlumberger in-house analysis with which they are ‘very encouraged’. The good news is that production from the Djeno continues although no volumes are provided and less good news is that the CPR might involve a long wait so mixed news overall.

Pantheon Resources

A very positive upgrade in Alkaid resources from Pantheon yesterday as they reveal that Alkaid and Phecda are now considered to be part of the same structural accumulation and that Phecda is now deemed to be appraisal. As a result the OIP is upgraded by a substantial 50% to 900 mmbo of P50 resources. It also enhances the recovery factor, modestly raised here from 10% to 10-15% but less modestly the indication is that it might be as high as 40%.

With first oil expected in 2021 and a farm-out process now under way with the data room now open shareholder might be excused for thinking that at long last Pantheon is delivering the goods. I am looking forward to meeting with the company in early July.

Reabold Resources

A slew of announcements from the OGA who have announced the UK 31st offshore licencing round with 144 new blocks awarded.

Reabold announce that as a 32.9% owner of Corallian Energy they are vicariously owners of 5 new licences, 22 new blocks which have been offered including blocks around the Colter discovery where they can ‘realise further potential in the area’.

Upland Resources

Upland announce that they have been offered 40% in each of seven blocks and part blocks in the Inner Moray Firth in the UKCS, ironically with the above mentioned Corallian Energy. The Innovate licence approach means that ‘initial work commitments are not costly’ and that Corallian’s resource estimates ‘speak for themselves’.

United Oil & Gas

And UOG get 100% of  4 blocks in the UK North Sea and 10% of 2 blocks adjacent to Colter which is contiguous with their 10% interest in the Colter licence which contains the Ballard Point discovery and the eastern portion of the Colter South discovery. Also see the Reabold comments on Colter which we might see a  bit more of.

Sound Energy

Yesterday I was able to interview Dr J.J. Traynor, CFO of Sound Energy, he gives me an update on Morocco and the process that the company is going through at the moment.

Core Finance interview: Dr JJ Traynor of Sound Energy

And finally…

England lost another football semi-final last night after some comedic defence play gifted the Netherlands the match with two colossal blunders.

Konta lost her semi-final too, losing in straight sets to Czech wonder girl Marketa Vondrousova in Paris today.

Sunday evening sees the Canadian GP, will this be the Ferrari chance to shine?

In the CWC yesterday the Windies showed their weakness as twice in the game they had the Aussies on the rack but still contrived to lose. This weekend sees Pakistan v Sri Lanka today, England v Bangladesh and Afghanistan v New Zealand tomorrow and India v Australia the highlight on Sunday, might see you there…

 

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https://www.oilcapital.com/companies/stocktube/13663/-we-are-like-north-american-shale-producers-except-we-make-money--says-genel-energy-s-bill-higgs-13663.html 'We are like North American shale producers except we make money', says Genel Energy's Bill Higgs https://www.oilcapital.com/companies/stocktube/13663/-we-are-like-north-american-shale-producers-except-we-make-money--says-genel-energy-s-bill-higgs-13663.html Fri, 07 Jun 2019 09:47:00 +0100 That's the message that Bill Higgs, Genel Energy's chief executive is taking to the US in a roadshow for potential investors there.

We are massively outperforming US shale producers, he told Proactive's Andrew Scott and we need to tell people just how resilient and reliable the business is.

"We are profitable at US$20 a barrel and currently very cash generative."

Genel recently strengthened its executive management team following the acquisition of two of Chevron’s projects in Kurdistan, which has boosted the pre-production side of its Iraqi/Kurdish portfolio.

We slightly beat our production forecast last year and with a fair wind can do it again in 2019, he added.

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https://www.oilcapital.com/companies/stocktube/13650/arcimoto-set-to-deliver-their-first--fuv--s-and-also-looking-to-crush-it-with-the--deliverator--13650.html Arcimoto set to deliver their first "FUV"'s and also looking to crush it with the "Deliverator" https://www.oilcapital.com/companies/stocktube/13650/arcimoto-set-to-deliver-their-first--fuv--s-and-also-looking-to-crush-it-with-the--deliverator--13650.html Thu, 06 Jun 2019 16:22:00 +0100 Arcimoto Inc (Nasdaq:FUV) Founder and CEO Mark Frohnmayer joined Steve Darling from Proactive Investors at the LD Microcap convention in Los Angeles to talk about the next version of their "Fun Utility Vehicle. It's called the "Deliverator" and Frohnmayer talks about what he feels will the uses for it.  

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https://www.oilcapital.com/companies/stocktube/13598/amazing-energy-oil-and-gas-having-success-by-continuing-to-do-it-there-way-13598.html Amazing Energy Oil and Gas having success by continuing to do it there way https://www.oilcapital.com/companies/stocktube/13598/amazing-energy-oil-and-gas-having-success-by-continuing-to-do-it-there-way-13598.html Wed, 05 Jun 2019 02:47:00 +0100 Amazing Energy Oil and Gas Co (OTCQX: AMAZ) Director Will McAndrew joins Proactive Investors' Steve Darling at the 9th Annual LD Micro Invitational investor conference in Los Angeles, CA. Amazing Energy is an independent oil and gas exploration, development, and production company, with operations centered in Texas and New Mexico. 

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https://www.oilcapital.com/companies/stocktube/13585/permex-petroleum-corp-getting-ready-for-major-work-on-oil-projects-in-texas-13585.html Permex Petroleum Corp getting ready for major work on oil projects in Texas https://www.oilcapital.com/companies/stocktube/13585/permex-petroleum-corp-getting-ready-for-major-work-on-oil-projects-in-texas-13585.html Tue, 04 Jun 2019 19:50:00 +0100 Permex Petroleum Corp (OTCQB:OILCF) (CSE:OIL) CEO Mehran Ehsan updates Proactive Investors' Steve Darling at the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA.

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https://www.oilcapital.com/companies/stocktube/13584/envision-solar-international-has-unique-technology-taking-ev-charging-to-a-new-level-13584.html Envision Solar International has unique technology taking EV charging to a new level https://www.oilcapital.com/companies/stocktube/13584/envision-solar-international-has-unique-technology-taking-ev-charging-to-a-new-level-13584.html Tue, 04 Jun 2019 19:45:00 +0100 Envision Solar International Inc (NASDAQ:EVSI) CEO Desmond Wheatley meets Proactive Investors' Steve Darling during the 9th Annual LD Micro Invitational Investor Conference in Los Angeles, CA. The California based company designs, manufactures, and sells solar powered products and proprietary technology solutions. Envision focuses on creating renewable energized products for electric vehicle and drone charging as well as energy security.

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https://www.oilcapital.com/companies/stocktube/13573/alternus-energy-explains-why-2019-is-an-inflection-year-for-the-solar-power-company-13573.html Alternus Energy explains why 2019 is an inflection year for the solar power company https://www.oilcapital.com/companies/stocktube/13573/alternus-energy-explains-why-2019-is-an-inflection-year-for-the-solar-power-company-13573.html Tue, 04 Jun 2019 12:43:00 +0100 Alternus Energy Inc (OTCMKTS:ALTN) CEO Vincent Browne tells Proactive Investors he believes 2019 to be an inflection year for the renewable power company.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30965/vsa-capital-market-movers---nulegacy-gold-30965.html VSA CAPITAL MARKET MOVERS - NuLegacy Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30965/vsa-capital-market-movers---nulegacy-gold-30965.html Tue, 04 Jun 2019 08:35:00 +0100

VSA Morning Miner, 04/06/19

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NuLegacy Gold (CVE:NUG)

NuLegacy Gold (NUG CN) has provided an update in relation to its planned exploration programme for 2019. Despite making significant progress towards generating encouraging and prospective new targets, the additional depth of the targets under the Eocene basalt cover means higher drilling costs. Given the size of the new targets and the amount of drilling that would be required NUG believe that it would be more effective to progress discussions with potential JV or merger partners rather than looking to finance a programme at multi year lows.

This comes as a disappoint given our recent expectation that drilling was due to commence imminently, however, our fundamental view that the Red Hill property is potentially host to attractive large scale and high-grade mineralisation remains unchanged.

We reiterate our Speculative Buy recommendation.

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30964/vsa-capital-market-movers---egdon-resources-30964.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30964/vsa-capital-market-movers---egdon-resources-30964.html Tue, 04 Jun 2019 08:33:00 +0100

VSA Morning Flow Test, 04/06/19

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Egdon Resources (LON:EDR)

Egdon Resources (LON:EDR) has announced the results of its underwritten Open Offer of 43,330,803 Open Offer Shares, which was initially announced on 15 May 2019.  EDR has received valid acceptances and excess applications from Qualifying Shareholders for a total of 31,200,612 Open Offer Shares. The company’s largest shareholder Petrichor Holdings Coöperatief U.A. has agreed to subscribe for the remaining 12,130,191 Open Offer Shares. Net proceeds from the Open Offer amount to £1.9 million and will be used to advance the company’s exploration and appraisal programme at the Gainsborough Trough and Resolution Gas Discovery.

At a General Meeting held on 3 June, shareholders voted in favour of approving a waiver granted by the Panel on Takeovers and Mergers of any requirement for Petrichor to make a general offer to shareholders of the company as a result of increasing its holding beyond 29.9%. Petrichor’s new holding is 33.99%.

EDR announced earlier this year the publication of an updated resource at Resolution demonstrating Contingent Resources of up to 389BCF and average Contingent Resources of 231BCF. The company is progressing discussions with potential partners for the acquisition of 3D seismic. Furthermore, full results from Springs road are expected in the coming weeks whilst strong production was maintained into April with the recent production update showing average production in 4mo18 of 238bopd.

We believe the success of the Open Offer, underpinned by support from EDR’s strategic shareholders Petrichor and Premier Oil (LON:PMO) demonstrates their confidence in the company’s asset base and the potential of the shale industry in the UK despite recent negative sentiment.
Following the issue of the Open Offer Shares, the Company will have 303,315,625 Ordinary Shares in issue and we have adjusted our year end forecast cash position to £3.3m.

We reiterate our Buy recommendation but reduce our target price by 14% to 39p to reflect the increase in share capital.

 

 

 

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https://www.oilcapital.com/companies/stocktube/13562/quadrise-fuels-signs-agreement-with-saudi-firm-for-its-msar-fuel-technology-13562.html Quadrise Fuels signs agreement with Saudi firm for its MSAR fuel technology https://www.oilcapital.com/companies/stocktube/13562/quadrise-fuels-signs-agreement-with-saudi-firm-for-its-msar-fuel-technology-13562.html Mon, 03 Jun 2019 14:43:00 +0100 Mike Kirk, executive chairman of Quadrise Fuels International PLC (LON:QFI), speaks to Proactive London's Andrew Scott after pencilling a partnership deal with Saudi Arabia-based Al Khafrah Holding Group (AKHG).

The MoA sees the two companies proposing to progress projects in Saudi Arabia that use Quadrise's MSAR fuel technology, with an initial focus on the use of MSAR fuel in boilers, an area in which Quadrise has previously experimented in Saudi Arabia.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30961/vsa-capital-market-movers---central-asia-metals-30961.html VSA CAPITAL MARKET MOVERS - Central Asia Metals https://www.oilcapital.com/columns/vsa-capital-market-movers/30961/vsa-capital-market-movers---central-asia-metals-30961.html Mon, 03 Jun 2019 14:16:00 +0100

Central Asia Metals#: Sasa Site Visit

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We recently visited Central Asia Metals (CAML LN) Sasa mine in North Macedonia. CAML have now been operators for over 18 months maintain strong margins and cashflow in 2018 with US$103m revenue and US$71m EBITDA. The site visit allowed us to see how the asset has been absorbed into the wider group, particularly in light of the ongoing Life of Mine review which is seeking to conclude whether additional value can be realised through optimising operational performance.

Sasa Life of Mine Review

As previously announced CAML is undertaking a holistic Life of Mine review of Sasa to better understand whether changes to operational practices and a deeper understanding of the ore body will enable efficiency gains and an increase to the potential realisable value. The first step of this was an updated resource statement which included an increase in lead and zinc grades as well as the conversion of 17% of Golema Reka into the higher Indicated category. The operational review will seek to understand amongst other things whether gains can be made by increasing plant throughput from 805kt in 2018 to nameplate capacity of 850ktpa.   

Recommendation and Target Price

Since our April update, the shares have pulled back 11% as US China tensions have reignited causing base metal prices to retreat through Q2 2019. While optimistic a resolution can be found we previously highlighted that the final stages would likely be the most contentious.

With leading cost metrics versus peers and trading on a significant dividend yield of 7% we continue to believe that CAML is attractively valued, and the recent pullback offers a buying opportunity. Furthermore, we believe that CAML is capable of enhancing Sasa’s operating practice to directly benefit earnings, however, the results and extent are as yet unclear. This does offer potential upside risk to our earnings outlook which is unchanged.

We reiterate our Buy recommendation and target price of 300p which implies 36% upside and 44% on a total return basis.

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30957/vsa-capital-market-movers---columbus-energy-resources-30957.html VSA CAPITAL MARKET MOVERS - Columbus Energy Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30957/vsa-capital-market-movers---columbus-energy-resources-30957.html Mon, 03 Jun 2019 08:11:00 +0100

VSA Morning Flow Test, 03/06/19

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Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (CERP LN) has announced full year results for 2018 demonstrating operational progress through improved financial results. Revenue of £7.6m was up 58% YoY as higher Trinidad production of 541bopd, up 47% YoY, significantly offset the closure of the Spanish operations. This was, however, complicated by the range bound oil price environment around the Special Petroleum Tax (SPT) threshold meaning royalties paid by CERP increased 88% YoY to £2.2m with revenue 12% below our estimate.

As a result of stronger revenues and careful cost management, CERP achieved gross profit of £1.45m, up from £0.08m YoY. As previously indicated, there were a number of one off charges in relation to the closure of the Spanish Operations along with post acquisition costs in relation to Steeldrum totalling £1.47m. Consequently, CERP achieved a net loss of £2.7m, narrowed from £5m in 2017 marginally higher than our estimate of £2.4m which included more conservative assumptions for the one off costs.

As a result of the operational improvements and stronger top line, CERP, was in a position to weather these one off issues and finished the year with a cash position of £1.2m having substantially reduced its debt position to just £0.3m. Capital spending of £1m was modestly lower than £1.7m in 2017. This highlights, in our view, the benefit to shareholders of the prudent operational strategy designed to cope with the challenges of the SPT in a range bound oil price environment in which simply raising production might result in higher net expenditure.  

CERP has highlighted that when the WTI oil price exceeds US$50.01/bbl an 18% sales tax is payable (the SPT) at the end of each quarter. This also takes into allowance capital spending but whilst the oil price is in a range of US$49.95/bbl and US$61.00/bbl the benefits of raising production are tightly aligned to the company’s capital spending. Q1 2019 was also affected by this with an average WTI price of US$54.83/bbl, however, the closure of the refinery in Trinidad simplified the regional supply chain and CERP received a small premium to WTI in Q1 2019 rather than a modest discount. It is not clear yet whether this is part of a sustainable change in the pricing environment given the substantial changes to the oil industry in Trinidad.  

We believe that with the significant progress made in 2018, CERP is now well placed to deliver on major milestones in 2019. We have previously highlighted the plan to drill the South West Peninsula, due in H2 2019, where despite the significant potential, given the more favourable fiscal terms of production it would only require a modest discovery to transform the company’s earnings profile. Furthermore, CERP is also making additional progress with enhanced oil recovery projects.

At Goudron, the waterflood pilot programme is due to continue after pressure communication was achieved between wells GY-665 and GY-667 following injection rates of up to 960bwpd and cumulative injection of 104,000 barrels. GY-209 is set to be converted to support the GY-664 well this year.       
Workovers were carried out across Inniss Trinity, Cory Moruga, South Erin and Bonasse and site preparations are underway for the CO2 injection programme at Inniss Trinity. While at Icacos CERP as of January 2019 now has operational control of the asset.
 
With ongoing remedial and optimisation across CERP’s now diversified production base there are a number of smaller opportunities to enhance profitability in 2019 and we believe that the strengthening of the producing asset base is central to supporting the major objectives for 2019 including the SWP well and advancing the M&A strategy.
 
We reiterate our Buy recommendation and 21.4p target price.  

 

 

 

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https://www.oilcapital.com/companies/stocktube/13550/point-loma-to-kick-off-production-on-its-oil-project-with-partner-salt-bush-energy-13550.html Point Loma to kick off production on its oil project with partner Salt Bush Energy https://www.oilcapital.com/companies/stocktube/13550/point-loma-to-kick-off-production-on-its-oil-project-with-partner-salt-bush-energy-13550.html Fri, 31 May 2019 19:24:00 +0100 Point Loma Resources Ltd (CVE:PLX) CEO Terry Meek tells Proactive Investors the oil and gas company has announced that its partner on the Wizard Lake Rex oil project has agreed to a two-well farm-in transaction to fund drilling and setup costs.

Meek says its partner, Salt Bush Energy Ltd, has agreed to incur 100% of the costs to drill, and complete and equip the two wells. Production is set to begin quite soon, in June 2019.

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https://www.oilcapital.com/companies/stocktube/13545/cadogan-petroleum-has--set-a-new-benchmark--with-blazh-10-well-13545.html Cadogan Petroleum has 'set a new benchmark' with Blazh-10 well https://www.oilcapital.com/companies/stocktube/13545/cadogan-petroleum-has--set-a-new-benchmark--with-blazh-10-well-13545.html Fri, 31 May 2019 11:24:00 +0100 Guido Michelotti tells Proactive that the result of the Blazh-10 well in Ukraine has proved beyond any doubt that Cadogan Petroleum PLC (LON:CDG) has become a very efficient operator.

Flow rates achieved were among the highest seen yet in this part of the world and are a benchmark in term of productivity for the region, he adds.

“It’s something we are proud of and was very important for the company.”

The well also fulfils the remaining licence commitment and paves the way for Cadogan to apply for a 20-year production licence.

It is also generating US$250,000 a month in revenue for the business, adds CEO Michelotti.

“Now have a solid foundation on which to build.”

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https://www.oilcapital.com/companies/stocktube/13543/united-oil-s-brian-larkin-welcomes-industry-big-hitter-as-cfo-13543.html United Oil's Brian Larkin welcomes industry big hitter as CFO https://www.oilcapital.com/companies/stocktube/13543/united-oil-s-brian-larkin-welcomes-industry-big-hitter-as-cfo-13543.html Fri, 31 May 2019 11:07:00 +0100 United Oil & Gas PLC's (LON:UOG) Brian Larkin chats to Proactive London's Andrew Scott after announcing the appointment of David Quirke as the company’s new chief financial officer.

Quirke was previously with Tullow Oil, leading the oiler’s ‘treasury function’ between 2003 and 2017, and more recently was advising Assala Energy following its acquisition of Shell’s assets in Gabon.

Larkin also talks through upcoming news and developments and gives a flavour of what he's looking for as far as future deals and acquisitions.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30948/vsa-capital-market-movers---dekeloil-30948.html VSA CAPITAL MARKET MOVERS - DekelOil https://www.oilcapital.com/columns/vsa-capital-market-movers/30948/vsa-capital-market-movers---dekeloil-30948.html Thu, 30 May 2019 08:46:00 +0100

VSA Morning Agri Comment, 30/05/19

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DekelOil: Equity Finance for Cashew Project

West African agricultural company DekelOil Public (LON:DKL) has announced a €1m investment into its investee company Pearlside Holdings from Hong Kong-based existing investor Concordia Corporation to assist with the development of its cashew processing project at Tiebissou in Côte d’Ivoire.

  • Concordia has increased its stake in Pearlside to 32.9% for a €1m investment at a €6m pre-money valuation.
  • DKL’s stake in the project will reduce to 37.8% from 43.8% as a result of the financing (with a partial conversion of a short-term bridge loan made to Pearlside from DKL during the transaction offsetting a small part of the dilution).
  • DKL has retained its option to secure a majority stake in the project with a call option over an additional 17% of shares in place.
  • First production from the facility remains on track for H1 2020. The cashew season starts in Côte d’Ivoire in February and runs to June. The project will stockpile nuts during the start of this period until the facility becomes operational.

VSA Comment

Existing project investor Concordia has increased its stake in the Tiebissou cashew project to c32.9% at the same nominal valuation that DKL made its own investment last December. However, due to DKL issuing shares at a premium to acquire its stake, its effective deal valuation was lower (c€4.2m). This additional investment further endorses the value of the project and will permit the drawdown of the already-agreed development loans.
 
We now estimate the project could deliver an additional c€2.2m in attributable profit to DKL by 2022 (assuming the option over the additional 17% is exercised).

Following the increased trading volume in the company’s shares last week we also note last night’s TR-1 announcement detailing the acquisition of c.13m shares (c.3.7% of shares outstanding) by a New York-based high net worth investor. This supports our thesis that the company is fundamentally undervalued at its current share price.   

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

Harvest Minerals

11.71

6.30

0.20

+3.3%

Kore Potash

18.55

2.15

0.05

+2.4%

DekelOil Public

10.57

3.00

0.05

+1.7%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Equatorial Palm Oil

3.47

0.97

(0.10)

-9.3%

Sirius Minerals

745.46

15.54

(0.66)

-4.1%

REA Holdings

66.23

163.50

(4.00)

-2.4%

 

 

 

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https://www.oilcapital.com/companies/stocktube/13500/iofina-s-tom-becker-discusses-75mln-raise-to-fast-track-development-of-new-plant-13500.html Iofina's Tom Becker discusses £7.5mln raise to fast-track development of new plant https://www.oilcapital.com/companies/stocktube/13500/iofina-s-tom-becker-discusses-75mln-raise-to-fast-track-development-of-new-plant-13500.html Tue, 28 May 2019 14:47:00 +0100 Iofina PLC's (LON:IOF) Tom Becker discusses with Proactive London some of the detail around their £7.5mln fundraise.

The funds raised will go towards paying off debt and expediting construction of a new production facility, while some cash has been earmarked for investment in new product development at Iofina Chemical.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30942/vsa-capital-market-movers---nulegacy-gold-30942.html VSA CAPITAL MARKET MOVERS - NuLegacy Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30942/vsa-capital-market-movers---nulegacy-gold-30942.html Tue, 28 May 2019 13:09:00 +0100

NuLegacy Gold#: Exploration Update and Management Changes

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Ready to Commence 2019 Drill Programme

As previously stated NUG has shifted its 2019 focus towards the Western area of its license area anticipating a strengthening of the hydrothermal Carlin system down dip, however, following the management changes NUG has further refined its targeting for 2019 drilling. This Western area has previously been avoided due to cover by Eocene basalts, however, CSAMT surveys and drilling in late 2018 confirmed the presence of the favourable limestone host rocks beneath this cover. Late snowfall has slightly delayed the planned start date for drilling although is anticipated to commence as soon as conditions improve.  

Management Changes

In April 2019 NUG announced a series of changes with James Anderson stepping back from his position as CEO to a non-executive Director role having been in post since 2012. The subsequent board and management reshuffle brings to the fore NUG’s most experienced ex-Barrick Gold (ABX US) personnel into more active roles including Ed Cope and Charles Weakly who will now be leading the running of the exploration programmes. Alex Davidson, (also ex-ABX) moves to Chairman while Albert Matter, a founding Director of NUG, returns to the role of CEO. 

Focus on Fourmile Lookalike and Western Targets

The interpretation of CSAMT surveys along with surface mapping has generated two key new targets, a Fourmile lookalike and the Rift Anticline. NUG’s Fourmile lookalike, which has yet to be drilled, has been previously referred to as East VIO and has shown up as a zone of high resistivity on last year’s CSAMT survey. NUG’s exploration team, having worked at Barrick Gold’s (ABX US) Fourmile, have likened the geophysical pattern to the initial findings at Fourmile (where an initial 0.7mnoz resource at 19g/t Au has now been defined). Two further targets have been identified within the Western area as well as a reinterpretation of the Serena zone where NUG achieved its 2018 breakthrough results.

Recommendation and Target Price

With the major reinterpretation and relogging work having yielded best ever results in 2018, NUG is now looking to capitalise on these results with its most experienced regional geologists now taking a more active role in the exploration strategy.

We reiterate our Speculative Buy recommendation.

 

 

 

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https://www.oilcapital.com/companies/stocktube/13477/victoria-oil--gas--positioned-for-growth--as-it-focuses-on-reducing-costs-and-hitting-profitability-13477.html Victoria Oil & Gas 'positioned for growth' as it focuses on reducing costs and hitting profitability https://www.oilcapital.com/companies/stocktube/13477/victoria-oil--gas--positioned-for-growth--as-it-focuses-on-reducing-costs-and-hitting-profitability-13477.html Fri, 24 May 2019 11:22:00 +0100 Victoria Oil & Gas PLC's (LON:VOG) Ahmet Dik recaps on 2018 following the release of the company's results as well as expectations for the year ahead.

In March this year VOG made significant changes to its management team and raised £13.5mln of new equity.

Dik says the company's getting back on track with ENEO now consistently taking more than 5.5mln cubic feet of gas per day – in the first quarter of 2019 the average group production rate was up 127% to 10.10mln cubic feet per day.

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https://www.oilcapital.com/companies/stocktube/13468/buru-energy-on-schedule-with-ungani-6h-well-drilling-program-13468.html Buru Energy on schedule with Ungani 6H well drilling program https://www.oilcapital.com/companies/stocktube/13468/buru-energy-on-schedule-with-ungani-6h-well-drilling-program-13468.html Fri, 24 May 2019 00:17:00 +0100 Buru Energy Ltd (ASX:BRU) executive chairman Eric Streitberg updates Proactive Investors on a drilling program just begun with a new rig in a new area at its Ungani 6H well.
 
Drilling has reached two-thirds the way down the first well and is due to be complete within the next week, with Buru expecting to finish the drilling program by the end of June. 
 
Streitberg said the company was drilling horizontally in the program rather than straight down as usual, enabling better results and potentially doubling production.
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https://www.oilcapital.com/companies/stocktube/13446/eqtec-signs-framework-agreement-with-california-based-phoenix-biomass-energy-13446.html EQTEC signs framework agreement with California-based Phoenix Biomass Energy https://www.oilcapital.com/companies/stocktube/13446/eqtec-signs-framework-agreement-with-california-based-phoenix-biomass-energy-13446.html Wed, 22 May 2019 14:09:00 +0100 EQTEC Plc's (LON:EQT) Ian Price adds some detail to the agreement announced today with California-based firm Phoenix Biomass Energy to develop biomass gasification power plants in the US.

The companies have already identified five projects in the US.

EQTEC will provide its proprietary gasifier technology, together with technical design and engineering for the power plants.

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https://www.oilcapital.com/companies/stocktube/13428/power-ore-kicks-off-drilling-at-flagship-opemiska-copper-project-in-quebec-13428.html Power Ore kicks off drilling at flagship Opemiska copper project in Quebec https://www.oilcapital.com/companies/stocktube/13428/power-ore-kicks-off-drilling-at-flagship-opemiska-copper-project-in-quebec-13428.html Tue, 21 May 2019 12:43:00 +0100 Stephen Stewart, chief executive of Power Ore Inc (CVE:PORE) speaks to Proactive's Andrew Scott while in London to mark the start of a drilling program at the company's flagship Opemiska Copper Mine Complex in Quebec.

Stewart says despite acquiring the project in December, it's an asset they've had their eye on for some time.

''When we took Power Ore public and spun off the existing assets and raised some capital, it really was us creating a vehicle to acquire this Opemiska asset ... it's a 10 year story in the making''.

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https://www.oilcapital.com/companies/stocktube/13424/block-energy-targeting-1500-barrels-a-day-by-end-of-2019-as-georgia-exceeds-all-expectations-13424.html Block Energy targeting 1500 barrels a day by end of 2019 as Georgia exceeds all expectations https://www.oilcapital.com/companies/stocktube/13424/block-energy-targeting-1500-barrels-a-day-by-end-of-2019-as-georgia-exceeds-all-expectations-13424.html Tue, 21 May 2019 11:12:00 +0100 Paul Haywood, chief executive of Block Energy PLC (LON:BLOE), chats to Proactive London's Andrew Scott after closing the bookbuild for their new placing.

Block launched a £12mln equity raise to fund an accelerated growth strategy in the Republic of Georgia.

The cash injection will pay for the drilling of up to four new horizontal sidetrack wells to scale up production, the expansion of production facilities to provide capacity for 4,000 to 5,000 barrels of oil per day, and the acquisition of 3D seismic data.

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https://www.oilcapital.com/companies/stocktube/13412/tlou-energy-considers-rfp--all-but-approved--and-now-ready-to-go-in-botswana-13412.html Tlou Energy considers RFP 'all but approved' and now ready to go in Botswana https://www.oilcapital.com/companies/stocktube/13412/tlou-energy-considers-rfp--all-but-approved--and-now-ready-to-go-in-botswana-13412.html Mon, 20 May 2019 08:52:00 +0100 Tony Gilby, managing director of Tlou Energy Limited (LON:TLOU), tells Proactive London he considers the RFP for a coal bed methane based pilot power plant in Botswana to be 'done and dusted'.

''It's a culmination of a many year process and the announcement in last week's newspaper clearly said the third and final stage of the process has been approved''.

''For all intents and purposes the RFP process has come to a head with a positive result''.

''We've got all the approvals in place and we're ready to produce power in the not-to-distant future'', Gilby says.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30926/vsa-capital-market-movers---bacanora-lithium-30926.html VSA CAPITAL MARKET MOVERS - Bacanora Lithium https://www.oilcapital.com/columns/vsa-capital-market-movers/30926/vsa-capital-market-movers---bacanora-lithium-30926.html Mon, 20 May 2019 08:19:00 +0100

VSA Morning Miner, 20/05/19

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Bacanora Lithium (LON:BCN)

Bacanora Lithium (BCN LN) has announced a proposed strategic investment by Ganfeng Lithium, China’s largest lithium producer and the third largest globally. The transaction includes investment at the project and corporate level for a total value of £21.96m (US$27.8m) at an equivalent price of 25p/sh, in line with the recent share price. This investment by one of the industry majors confirms our view of the attractive economic and technical potential of the project as well as highlighting the ongoing need for the majors to secure additional production capacity given the strong demand backdrop.

The corporate level investment of £14.4m for 57.6m shares at 25p/sh. also gives Ganfeng the right to a Board position as well as pre-emption rights on new equity issuance. The project level investment into a subsidiary of BCN gives Ganfeng the right to acquire 22.5% of the project for £7.56m (equivalent to a 25p/sh. valuation) and the option to acquire up to 50% within 24 months of the initial investment based on market valuations at the time of exercise. The project level investment also provides the right to appoint a Director to the Board of the project level company.

In addition, Ganfeng on completion of the strategic investment will receive exclusive offtake rights to purchase 50% of all lithium products for stage 1 (100% capacity of 17.5ktpa) as well as an option to increase to 75% of all lithium production at Stage 2 (100% capacity of 35ktpa). All production is to be purchased at market prices.

Our prior valuation assumption had incorporated the potential dilution from strategic funding at 50p/sh. Updating our model to reflect this strategic investment and proposed reduction in BCN’s interest at the project level results in a 13% reduction in our target price to £1.00/sh.

With Ganfeng’s support as a cornerstone investor we believe that BCN is now well placed to secure the remaining project financing. We had previously assumed around US$180m would be required in equity given the existing RK Mining debt facility (US$150m) notwithstanding commitments from other strategics such as Hanwa for US$25m.

Although we remain convinced that the pilot plant in Hermosillo acts as a major derisking factor in the BCN investment case we believe that Ganfeng’s support in the finalisation of the EPC engineering contract, the implementation of the plant design and construction as well as project commissioning should provide investors with significant additional comfort given Ganfeng’s expertise in the sector.

We reiterate our Buy recommendation although reduce our target price to £1.00/sh. to reflect the proposed strategic transaction.

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30925/vsa-capital-market-movers---bacanora-lithium-30925.html VSA CAPITAL MARKET MOVERS - Bacanora Lithium https://www.oilcapital.com/columns/vsa-capital-market-movers/30925/vsa-capital-market-movers---bacanora-lithium-30925.html Mon, 20 May 2019 08:19:00 +0100

VSA Morning Miner, 20/05/19

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Bacanora Lithium (LON:BCN)

Bacanora Lithium (BCN LN) has announced a proposed strategic investment by Ganfeng Lithium, China’s largest lithium producer and the third largest globally. The transaction includes investment at the project and corporate level for a total value of £21.96m (US$27.8m) at an equivalent price of 25p/sh, in line with the recent share price. This investment by one of the industry majors confirms our view of the attractive economic and technical potential of the project as well as highlighting the ongoing need for the majors to secure additional production capacity given the strong demand backdrop.

The corporate level investment of £14.4m for 57.6m shares at 25p/sh. also gives Ganfeng the right to a Board position as well as pre-emption rights on new equity issuance. The project level investment into a subsidiary of BCN gives Ganfeng the right to acquire 22.5% of the project for £7.56m (equivalent to a 25p/sh. valuation) and the option to acquire up to 50% within 24 months of the initial investment based on market valuations at the time of exercise. The project level investment also provides the right to appoint a Director to the Board of the project level company.

In addition, Ganfeng on completion of the strategic investment will receive exclusive offtake rights to purchase 50% of all lithium products for stage 1 (100% capacity of 17.5ktpa) as well as an option to increase to 75% of all lithium production at Stage 2 (100% capacity of 35ktpa). All production is to be purchased at market prices.

Our prior valuation assumption had incorporated the potential dilution from strategic funding at 50p/sh. Updating our model to reflect this strategic investment and proposed reduction in BCN’s interest at the project level results in a 13% reduction in our target price to £1.00/sh.

With Ganfeng’s support as a cornerstone investor we believe that BCN is now well placed to secure the remaining project financing. We had previously assumed around US$180m would be required in equity given the existing RK Mining debt facility (US$150m) notwithstanding commitments from other strategics such as Hanwa for US$25m.

Although we remain convinced that the pilot plant in Hermosillo acts as a major derisking factor in the BCN investment case we believe that Ganfeng’s support in the finalisation of the EPC engineering contract, the implementation of the plant design and construction as well as project commissioning should provide investors with significant additional comfort given Ganfeng’s expertise in the sector.

We reiterate our Buy recommendation although reduce our target price to £1.00/sh. to reflect the proposed strategic transaction.

 

 

 

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https://www.oilcapital.com/companies/stocktube/13399/simec-atlantis--value-will-be-recognised-as-revenues-build-says-ceo-cornelius-13399.html Simec Atlantis' value will be recognised as revenues build says CEO Cornelius https://www.oilcapital.com/companies/stocktube/13399/simec-atlantis--value-will-be-recognised-as-revenues-build-says-ceo-cornelius-13399.html Fri, 17 May 2019 11:45:00 +0100 Tim Cornelius, chief executive of renewable energy group Simec Atlantis PLC (LON:SAE) says anyone making an offer would have to pay substantially more than the current share price.

He says he is aware of talk of a potential break-up, which is understandable especially while the share price is so out of kilter with the underlying book value.

Cornelius it is easy to make a case for a value at least four times more than the current £80mln market cap.

In the meantime, the deal with Green Highland Renewables will close in around two weeks and Cornelius is keen for more hydro-power acquisitions in Scotland.

At offshore tidal power project MeyGen, Simec and GE are also preparing to install the two of the largest undersea turbines in the world, which will boost efficiency and reliability.

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https://www.oilcapital.com/columns/the-pay-zone/30912/genel-energy-premier-oil-and-diversified-gas--oil-30912.html Genel Energy, Premier Oil and Diversified Gas & Oil https://www.oilcapital.com/columns/the-pay-zone/30912/genel-energy-premier-oil-and-diversified-gas--oil-30912.html Thu, 16 May 2019 08:28:00 +0100

Genel Energy

An AGM statement today from Genel where operations are clearly going very well. Total net WI production is 37,600 bopd running slightly ahead of the expected increase in y/y production. As one would expect the cash position is good, the company has generated almost $50m in free cash flow in the first four months of the year. Chairman Steve Whyte has announced that he will step down when a suitable replacement has been found. His tenure in office has been exceptional, in the two years or so since he has been in the job the shares have increased from 80p, production which was declining is now significantly increasing and at that time the company had unpaid receivables of $400m and debt of $142m, production and FCF are both now rising to substantial levels. How things change and shareholders at today’s AGM will be able to commend him on a job very well done.

Premier Oil

Very little to add for Premier at today’s AGM, operationally all is going well, indeed with production of 80.1 kboed the company has seen fit to up its guidance to 75-80 kboed. Tolmount powers ahead with the east appraisal well upcoming and the Zama programme is scheduled to complete next month after a highly successful operation. Net debt is now $2.25bn and reducing at the upper end of the plan, Sea Lion is also progressing well.

Core Finance CEO interview: Tony Durrant of Premier Oil

Diversified Gas & Oil

Today’s update shows Q1 production of 69/- b/d in line with the year end and April production of 70/- b/d. The figure is now 90/- b/d if you include the numbers from the HG Energy acquisition and margins are 55% in line with forecast. I understand that the company is taking a party of analysts/investors to the US to see the assets at first hand although so far no formal detail has come from the company, its brokers or the IR, watch this space…

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https://www.oilcapital.com/companies/stocktube/13316/future--remains-bright--at-union-jack-as-it-eagerly-awaits-west-newton-results-13316.html Future 'remains bright' at Union Jack as it eagerly awaits West Newton results https://www.oilcapital.com/companies/stocktube/13316/future--remains-bright--at-union-jack-as-it-eagerly-awaits-west-newton-results-13316.html Mon, 13 May 2019 10:19:00 +0100 David Bramhill, chairman of Union Jack Oil PLC (LON:UJO), speaks to Proactive London's Andrew Scott following the release of the firm's 2018 results.

The sit-down interview came as UJO  awaits news from the potentially high impact West Newton appraisal well.

In October, the company acquired a 16.665% interest in West Newton via a farm-in deal and last month drilling operations began.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30899/vsa-capital-market-movers---columbus-energy-resources-30899.html VSA CAPITAL MARKET MOVERS - Columbus Energy Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30899/vsa-capital-market-movers---columbus-energy-resources-30899.html Mon, 13 May 2019 08:26:00 +0100

VSA Morning Flow Test, 13/05/19

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Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (LON:CERP)  has announced it has been granted a Private Petroleum Licence for the Bonasse Licence Area in the South West Peninsula of Trinidad.  The licence, which includes the Bonasse field is granted by the Trinidad Ministry of Energy and Energy Industries and formally recognises that Columbus has the right to exploit any oil and gas in the licenced area. Having previously announced that a well location had been chosen this is an important step in terms of regulatory clearance and confirms that the well will be drilled in 2019.

CERP is undertaking the necessary pre-drill activities to commence drilling in Q3 2019 and this continues to be one of the key catalysts for the stock.  Drilling does however remain subject to obtaining Governmental approval; however, the grant of the Private Petroleum Licence is an important step towards this.

The granted licence has a term of 20 years and can be renewed upon an application by the Company for further periods of 20 years. As part of the requirements of the licence, the minimum work obligation includes the workover of three existing wells, with the addition of the drilling of one well in 2019. This confirms that the exploration of the SWP will commence in 2019,  funded by existing cash resources which is a major step, in our view, in the development of CERP.

We reiterate our Buy recommendation and 21.4p target price.

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30897/vsa-capital-market-movers---tectonic-gold-30897.html VSA CAPITAL MARKET MOVERS - Tectonic Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30897/vsa-capital-market-movers---tectonic-gold-30897.html Mon, 13 May 2019 08:19:00 +0100

VSA Morning Miner, 13/05/19

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Tectonic Gold (LON:TTAU)

Tectonic Gold (LON:TTAU) has announced that it has restructured the previously announced alluvial diamond mining joint venture with VAST Mineral Sands Pty Ltd and has taken a 100% economic interest in the diamond mining contract. VAST remains a partner via the equity consideration in TTAU and has a production royalty contract (3% on gross diamond sales). VAST continues to have a significant local presence given its broader local interests in mineral sands and will be able to provide additional support as a result.

As of May 1 2019, TTAU has operational control of the VAST land mining contract and the rationale for the transaction continues to be utilising cash flows derived from diamonds to fund gold exploration at the company’s core Australian gold exploration assets. Equipment leases and the onsite mining team have now been transferred to TTAU. In addition, TTAU will reimburse VAST for provision of ongoing support and provision of rehabilitation, security and health and safety services given their significant local presence.

Initially production is anticipated at a run rate of 950 carats per month with a second phase to ramp up to 1,500 carats per month. TTAU is in discussions with equipment lease finance providers whilst initial bulk sampling indicated grade and average stone size in excess of expectations.

We reiterate our Speculative Buy recommendation.

 

 

 

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https://www.oilcapital.com/companies/stocktube/13272/chariot-oil--gas-announces-resource-upgrade-at-recently-acquired-anchois-project-13272.html Chariot Oil & Gas announces resource upgrade at recently acquired Anchois project https://www.oilcapital.com/companies/stocktube/13272/chariot-oil--gas-announces-resource-upgrade-at-recently-acquired-anchois-project-13272.html Thu, 09 May 2019 07:10:00 +0100 Chariot Oil & Gas Limited (LON:CHAR) CEO Larry Bottomley talks Proactive London's Andrew Scott through a new independent report on their recently acquired Anchois project, offshore Morocco.

The CPR, put together by consultant Netherland Sewell & Associates, delivers an upgrade to the gas resources to around one trillion cubic feet.

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https://www.oilcapital.com/companies/stocktube/13256/mosman-oil--gas-s-john-barr-details-champion-farm-out-deal-13256.html Mosman Oil & Gas's John Barr details Champion farm-out deal https://www.oilcapital.com/companies/stocktube/13256/mosman-oil--gas-s-john-barr-details-champion-farm-out-deal-13256.html Wed, 08 May 2019 11:41:00 +0100 Mosman Oil And Gas Ltd (LON:MSMN) chairman John Barr talks Proactive London's Andrew Scott through the just-announced farm-out deal for the Champion project, in east Texas, with ASX-listed Xstate Resources Limited (ASX:XST).

It'll see Mosman sell a portion of its 60% stake in Champion in return for project funding commitments.

Champion is among the assets in which Mosman is partnered with Baja Oil & Gas. It is a follow on project from the successful Stanley venture.

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https://www.oilcapital.com/companies/stocktube/13254/tlou-energy-secures-final-environmental-approval-as-it-awaits-rfp-decision-13254.html Tlou Energy secures final environmental approval as it awaits RFP decision https://www.oilcapital.com/companies/stocktube/13254/tlou-energy-secures-final-environmental-approval-as-it-awaits-rfp-decision-13254.html Wed, 08 May 2019 09:44:00 +0100 Tlou Energy Ltd's (LON:TLOU) Tony Gilby speaks to Proactive London's Andrew Scott soon after announcing that Botswana's Department of Environmental Affairs approved the company’s environmental impact statement (EIS) for its planned coal bed methane project.

The EIS was for a 20 megawatt coal bed methane fuelled power generation plant, plus a 66kV Transmission Line to Serowe and a solar farm with a capacity of up to 20 megawatts.

Gilby adds they're now awaiting the outcome of well testing and separately the CBM tender process.

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https://www.oilcapital.com/companies/stocktube/13252/eqtec-signs-mou-for-significant-billingham-energy-project-13252.html EQTEC signs MoU for significant Billingham energy project https://www.oilcapital.com/companies/stocktube/13252/eqtec-signs-mou-for-significant-billingham-energy-project-13252.html Wed, 08 May 2019 07:42:00 +0100 Ian Price, chief executive of EQTEC Plc (LON:EQT), discusses the signing this morning of a conditional Memorandum of Understanding along with its strategic partner to jointly develop the Billingham Energy waste gasification and power plant.

Price says the project's anticipated to process 200,000 metric tons per annum of refuse derived fuel from municipal waste.

EQTEC will act as lead developer and technology provider for the Project

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https://www.oilcapital.com/companies/stocktube/13223/afc-energy-expects-big-wins-from-its-first-mover-advantage-in-ev-charging-13223.html AFC Energy expects big wins from its first mover advantage in EV charging https://www.oilcapital.com/companies/stocktube/13223/afc-energy-expects-big-wins-from-its-first-mover-advantage-in-ev-charging-13223.html Fri, 03 May 2019 11:31:00 +0100 Adam Bond, chief executive of AFC Energy PLC (LON:AFC), speaks to Proactive London's Andrew Scott during a busy week for the firm in which they've announced a significant deal with one of Europe’s largest manufacturers of electric vehicle (EV) charging points to create systems using AFC's fuel cell technology.

Bond says Rolec Services hope to showcase the first demonstration product in the second half of this year.

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https://www.oilcapital.com/companies/stocktube/13210/uge-international-looking-at-new-york-city-to-see-growth-in-commercial-solar-13210.html UGE International looking at New York City to see growth in commercial solar https://www.oilcapital.com/companies/stocktube/13210/uge-international-looking-at-new-york-city-to-see-growth-in-commercial-solar-13210.html Thu, 02 May 2019 18:19:00 +0100 UGE International Ltd (OTCQB: UGEIF) (CVE:UGE) CEO Nick Blitterswyk spoke with Proactive Investors at the ThinkEquity Conference in New York. The New York City-based solar energy solutions provider offers businesses solar solutions from conceptualization to construction as well as providing project owners with engineering, procurement, and construction services. 

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https://www.oilcapital.com/companies/stocktube/13195/nu-oil--gas--moving-quickly--in-its-discussions-towards-a-commercial-deal-13195.html Nu-Oil & Gas 'moving quickly' in its discussions towards a commercial deal https://www.oilcapital.com/companies/stocktube/13195/nu-oil--gas--moving-quickly--in-its-discussions-towards-a-commercial-deal-13195.html Thu, 02 May 2019 12:06:00 +0100 Nu-Oil & Gas plc's (LON:NUOG) Simon Bygrave gives a recap on the business and its current pipeline of projects.

''We're relatively unique in focusing on stranded resources where the existing partners either don't have a plan or the appetite to take them forward .... a company such as us is willing to take a different approach to technology, commercial structures and financing to convert those undervalued proven resources into commercial, attractive and technically-viable projects''.

''We are working to build a portfolio through the acquisition and development of such projects through ourselves, our subsidiary and our joint venture marginal field development company''.

Nu-Oil's also recently appointed a new executive chairman, Graham Scotton, who's got significant experience covering technical, operational, planning, commercial and management roles.

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https://www.oilcapital.com/companies/stocktube/13188/po-valley-energy-upgrades-selva-onshore-gas-resources-and-adds-two-oil-plays-to-portfolio-13188.html Po Valley Energy upgrades Selva onshore gas resources and adds two oil plays to portfolio https://www.oilcapital.com/companies/stocktube/13188/po-valley-energy-upgrades-selva-onshore-gas-resources-and-adds-two-oil-plays-to-portfolio-13188.html Thu, 02 May 2019 04:25:00 +0100 Po Valley Energy Limited (ASX:PVE) chairman Michael Masterman updates Proactive Investors on the substantial upgrade in gas resources at the company's Selva onshore gas field development in northern Italy. 
 
The oil and gas explorer has also announced two very substantial upgrades in the size of its gas condensate and oil assets.
 
Masterman says he's confident Selva and the larger offshore Teodorico field, along with two new oil additions to the portfolio, will generate strong revenues for the company. 
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https://www.oilcapital.com/companies/stocktube/13185/elixir-petroleum-appoints-richard-cottee-as-chairman-begins-development-of-mongolian-gas-project-13185.html Elixir Petroleum appoints Richard Cottee as chairman, begins development of Mongolian gas project https://www.oilcapital.com/companies/stocktube/13185/elixir-petroleum-appoints-richard-cottee-as-chairman-begins-development-of-mongolian-gas-project-13185.html Thu, 02 May 2019 01:53:00 +0100 Elixir Petroleum Ltd (ASX:EXR) chief executive officer Neil Young speaks to Proactive Investors about the gas explorer's recent appointment of Richard Cottee as non-executive chairman.
 
Young says Cottee is considered a "godfather" of coal seam gas in Queensland, leading QGC from a 20 million market-cap company with a share price of 20 cents through to its acquisition by British Gas for nearly $6 billion and 6$ a share.
 
He notes this has "huge resonance with our own position of possessing an early-stage but highly-prospective and well-located coal seam gas block just north of China in Mongolia."
 
The company has started early-stage exploration activities in Mongolia, including government approvals, and expects Cottee's background and skills to assist in delivering an asset that gives the most value to shareholders.
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https://www.oilcapital.com/companies/stocktube/13175/iofina-highlights-record-production-and-earnings-for-2018-as-iodine-prices-strengthen-13175.html Iofina highlights record production and earnings for 2018 as Iodine prices strengthen https://www.oilcapital.com/companies/stocktube/13175/iofina-highlights-record-production-and-earnings-for-2018-as-iodine-prices-strengthen-13175.html Wed, 01 May 2019 13:57:00 +0100 Iofina PLC's (LON:IOF) Tom Becker tells Proactive London's Andrew Scott 2018 was a record year for the business on the back of increased iodine production at their IOsorb plants in Oklahoma.

It reported record earnings (EBITDA) for the year ended 31 December of US$2.6mln - 89% higher than the prior year - while revenues climbed 15% to US$24mln.

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https://www.oilcapital.com/companies/stocktube/13167/peninsula-energy-presents-webcast-with-operational-and-financial-highlights-from-march-quarter-13167.html Peninsula Energy presents webcast with operational and financial highlights from March quarter https://www.oilcapital.com/companies/stocktube/13167/peninsula-energy-presents-webcast-with-operational-and-financial-highlights-from-march-quarter-13167.html Wed, 01 May 2019 05:39:00 +0100 Peninsula Energy Ltd (ASX:PEN) chief executive officer Wayne Heili provides Proactive Investors with its March 2019 quarterly results webcast, covering activities and financial highlights from the quarter.
 
Heili notes the healthy upward movement in PEN's share price during the quarter, saying the market has begun to recognise the consistent delivery of positive outcomes along with the upside potential of US-based uranium production operations. 
 
The presentation also includes comments on the successful low-pH field demonstration trials at Peninsula's Lance Projects, and their relevant permitting approvals, which has been a recent focus of the company. 
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https://www.oilcapital.com/companies/stocktube/13147/aminex-plc-looks-ahead-to-chikumbi-drilling-and-completion-of-ruvuma-farm-out-13147.html Aminex PLC looks ahead to Chikumbi drilling and completion of Ruvuma farm-out https://www.oilcapital.com/companies/stocktube/13147/aminex-plc-looks-ahead-to-chikumbi-drilling-and-completion-of-ruvuma-farm-out-13147.html Tue, 30 Apr 2019 06:34:00 +0100 Jay Bhattacherjee, chief executive of Aminex PLC (LON:AEX), speaks to Proactive Investors following the release of their 2018 results.

Looking to 2019, he says the completion of the Ruvuma farm-out will be a significant milestone for the company and an event which will bring in a further US$5mln in cash.

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https://www.oilcapital.com/companies/stocktube/13136/alternus-energy-inc-ceo-pleased-with-increased-revenue-growth-in-2018-13136.html Alternus Energy Inc CEO pleased with increased revenue growth in 2018 https://www.oilcapital.com/companies/stocktube/13136/alternus-energy-inc-ceo-pleased-with-increased-revenue-growth-in-2018-13136.html Mon, 29 Apr 2019 19:09:00 +0100 Alternus Energy Inc (OTCMKTS:ALTN) CEO Vincent Browne tells Proactive Investors the renewable energy company saw its revenue jump last year, thanks to the winning of European government counter-party contracts that are set to deliver long-term cash flows.

Browne says revenue was in line with that the company expected, the primary driver being expanded operations in Germany, Italy and Romania.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30853/vsa-capital-market-movers---egdon-resources-30853.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30853/vsa-capital-market-movers---egdon-resources-30853.html Mon, 29 Apr 2019 08:11:00 +0100

VSA Morning Flow Test, 29/04/19

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Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has provided an update on the planning inquiry for its Wressle site in North Lincolnshire. Planning consent was refused in late 2018 and the company as previously announced intend to appeal the decision. A public inquiry for the appeal will now be heard on 5 November 2019 and will likely last for up to six days. The case will be presented by a QC and with support from the Council own professional planning officer which highlights the strength of the revised application and the company continue to believe they have fully satisfied the requirements at a local and national level and therefore have a strong case.

There has also been newsflow on the unconventional side with the acquisition of Third Energy’s onshore business, Third Energy Onshore Limited. This includes the unconventional gas site at Kirby Misperton, KM8, where in 2016 the company received approval from North Yorkshire County Council to frac, test and produce for up to nine years. Although the valuation has not been disclosed, the acquisition by a subsidiary of Alpha Energy, a US oil and gas player demonstrates ongoing interest in UK shale by strategic players. The acquisition comes despite the current regulatory framework which earlier held back Cuadrilla’s recent testing while environmental protests in London have highlighted the misunderstood nature of the industry’s potential.

We also note the resignation of Natascha Engel over the weekend, from her position as the UK’s shale gas commissioner citing paralysis of central government despite nominally supportive central policies. We highlight Engel’s argument that the 0.5ML threshold for the traffic light system is “ridiculously low” and is based on “myths and scare stories”. Furthermore, one of the key advantages of natural gas is the lower level of emissions compared to other forms of energy. This therefore represents a practical and effective compromise whilst infrastructure for energy storage is developed and rolled out to make renewables viable. Indeed, despite the advances in the renewable sector gas is expected to continue to form around a third of primary energy demand in the UK in 2035.

We reiterate our Buy recommendation and 45.2p target price.

 

 

 

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https://www.oilcapital.com/companies/stocktube/13115/mosman-oil--gas-s-john-barr-discusses-q1-production-increase-and-australia-plans-13115.html Mosman Oil & Gas's John Barr discusses Q1 production increase and Australia plans https://www.oilcapital.com/companies/stocktube/13115/mosman-oil--gas-s-john-barr-discusses-q1-production-increase-and-australia-plans-13115.html Fri, 26 Apr 2019 10:40:00 +0100 Mosman Oil And Gas Ltd's (LON:MSMN) John Barr caught up with Proactive London's Andrew Scott after reporting a 59% increase in quarterly production.

Net production in the three months to the end of March was 6,033 barrels of oil equivalent (BoE), compared to 3,773 BOE in the previous quarter.

Barr says they're now making applications to acquire additional seismic data for the EP 145 permit in the Amadeus Basin, near where the Dukas well is being drilled to test a large helium and hydrocarbons prospect.

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https://www.oilcapital.com/companies/stocktube/13113/petsec-energy-develops-oil-and-gas-exploration-project-in-yemen-amid-management-changes-13113.html PetSec Energy develops oil and gas exploration project in Yemen amid management changes https://www.oilcapital.com/companies/stocktube/13113/petsec-energy-develops-oil-and-gas-exploration-project-in-yemen-amid-management-changes-13113.html Fri, 26 Apr 2019 00:08:00 +0100 PetSec Energy Ltd (ASX:PSA) executive chairman Terry Fern updates Proactive Investors on the oil company's recent management changes and development of its exploration field in Yemen.

Fern says that Block S1 at the project has five fields, 50 million barrels of oil and 550 billion cubic feet of gas

He adds: "Just at 5,000 barrels per oil a day of brent prices of $70 a day, the net revenue for a four-year production... is $100 million."

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https://www.oilcapital.com/companies/stocktube/13097/envision-solar-international-posts-sunny-revenue-for-2018-uplists-to-nasdaq-13097.html Envision Solar International posts sunny revenue for 2018, uplists to Nasdaq https://www.oilcapital.com/companies/stocktube/13097/envision-solar-international-posts-sunny-revenue-for-2018-uplists-to-nasdaq-13097.html Wed, 24 Apr 2019 19:16:00 +0100 Envision Solar International (NASDAQ: EVSI) CEO Desmond Wheatley tells Proactive Investors the electric vehicle charging manufacturer has posted record 2018 revenues of $6.2 million, which he says is a 336% increase from the year ago period.

Wheatley says besides record revenues, the company is delighted to be graduating to trade on the Nasdaq.

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https://www.oilcapital.com/companies/stocktube/13088/genel-energy--a-business-going-places--with-material-growth-opportunities-13088.html Genel Energy 'a business going places' with material growth opportunities https://www.oilcapital.com/companies/stocktube/13088/genel-energy--a-business-going-places--with-material-growth-opportunities-13088.html Wed, 24 Apr 2019 12:04:00 +0100 Bill Higgs, chief executive of Genel Energy PLC (LON:GENL), speaks to Proactive London soon after announcing the company's to pay a maiden dividend.

He says free cash flow in 2018 came to $164 mln and as a result they've recommended a final dividend of 10¢ per share - a total distribution of $27.9 mln.

With 30 years of global exploration, development and operations experience under his belt, Higgs took over as CEO earlier this month.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30830/vsa-capital-market-movers---colombus-energy-resources-30830.html VSA CAPITAL MARKET MOVERS - Colombus Energy Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30830/vsa-capital-market-movers---colombus-energy-resources-30830.html Thu, 18 Apr 2019 08:38:00 +0100

VSA Morning Flow Test, 18/04/19

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Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (CERP LN)# has provided Q1 2019 quarterly operational update demonstrating significant progress in progressing the SWP exploration programme with a well location chosen for Q3 2019 and advanced discussion in relation to the acquisitive growth strategy in South America.

Production for the quarter averaged 602 bopd, up 20% YoY, but down 10% QoQ to an average of 670 bopd. Although Q4 2018 had been impacted by severe weather conditions in the last quarterly update we highlighted management’s focus on producing profitable barrels. Given the production contracts under which CERP operates and relationship between the contracts, Special Petroleum Tax (SPT) and the relationship to benchmark oil prices CERP is now demonstrating this strategy effectively, in our view.     Price variation in the WTI US$50-60/bbl range is particularly important in this regard given the taxation thresholds.

In order to avoid negative impacts from this step change in taxation CERP reduced well work activity to a single workover rig being used continuously in Q1 2019 compared to up to four units being operated in Q4 2018. Gross revenues were therefore down 14% QoQ to US$2.78m (Q4 2018:US$3.23m), partly due to reduced production and a 3.3% decrease in realised sales price from operations in Q1 2019 at US$55.67 (US$57.58/bbl in Q4 2018).

However, we highlight two crucial points from this quarter; despite the decline in production and lower revenues CERP increased operating cashflow 8% QoQ to US$0.4m demonstrating the effectiveness of the strategy. Secondly, with peak production of 1,000 bopd achieved in late January and production exceeding 860 bopd on three occasions during the quarter this indicates that under more favourable economic conditions the option to increase production remains intact. Technical progress was also made with regard to the waterflood programme.

As a consequence, cash at the end of the quarter decreased to US$2.06m (Q4 2018: US$2.60m) while the Lind debt facility reduced to US$0.26m (Q4 2018: US$0.40m.  The Lind US$3.25 million loan facility which was established in July 2018, expired in early January 2019 without any drawdown as expected.

South West Peninsula

Operations in the South West Peninsula (SWP) have progressed with detailed technical studies providing information to conduct an exploratory drilling programme in the region and a well site has been identified for Q3 2019. The SWP has identified over 12 shallow and deep prospects ranging in size from 20mmbbl up to 400mmbbl with the potential for stacked vertical targets. The drilling programme will be funded from available resources and is intended to commence in Q3 2019, subject to receiving Government approvals. We previously highlighted the beneficial rig access arising from the Steeldrum acquisition which is partly why the well cost can be funded from existing cash resources. The first well will test the Middle Cruse, covered by existing environmental permits and technical consultants are supporting management with finalising preparations for the initial hole and ongoing campaign. We highlight that whilst the IPSC at Goudron has hampered recent performance, one of this management teams initial successes was to renegotiate the relevant contracts enabling more attractive returns arising from exploration success.

At the Inniss-Trinity CO2 project, the company continued to work with the relevant Trinidad authorities and partner Predator Oil & Gas (PDR LN).  Following the receipt of approval for conduct of the CO2 Enhanced Oil Recovery pilot project from Heritage Petroleum Company, PRD will commence first injections in late Q2 2019 or early Q3 2019, subject to the receipt of the remaining regulatory approvals. 

Acquisitive Growth Strategy

The company remains committed to sourcing additional M&A opportunities and CERP is in exclusive discussions for the award of a concession in a South American country, following a tender process.  The company reports the potential opportunity would involve a low cost discovered onshore oilfield in an established hydrocarbon province and management expects to be able to follow up with further detail in mid-2019. 

Although absolute production numbers have perhaps disappointed in Q1 2019, the positive QoQ impact on financials underpins our confidence in the near-term production strategy. With exploration at SWP now approaching, where the potential is significantly greater than the existing production assets, this indicates near term catalysts for the shares as this represents the realisation of the broader strategy that management has been laying the groundwork for in recent months.

We reiterate our Buy recommendation and 21.4p target price.

 

 

 

 

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https://www.oilcapital.com/companies/stocktube/13038/iofina-plc-makes-strong-start-to-2019-with-best-ever-first-quarter-of-production-13038.html Iofina PLC makes strong start to 2019 with best ever first quarter of production https://www.oilcapital.com/companies/stocktube/13038/iofina-plc-makes-strong-start-to-2019-with-best-ever-first-quarter-of-production-13038.html Wed, 17 Apr 2019 14:14:00 +0100 Tom Becker, chief executive of  Iofina PLC (LON:IOF), talks Proactive London's Andrew Scott through what's been a record first quarter of production for them.

The company produced 134.4 metric tonnes (MT) in the opening three months of 2019, up 14% year-on-year (Q1 18: 118.2MT).

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https://www.oilcapital.com/companies/stocktube/13037/columbus-energy-s-koot-details-upcoming-drill-programme-and-significant-new-deal-13037.html Columbus Energy's Koot details upcoming drill programme and significant new deal https://www.oilcapital.com/companies/stocktube/13037/columbus-energy-s-koot-details-upcoming-drill-programme-and-significant-new-deal-13037.html Wed, 17 Apr 2019 14:00:00 +0100 Leo Koot, chief executive of Columbus Energy Resources PLC (LON:CERP), talks Proactive London's Andrew Scott through the plans for an upcoming drill campaign on the South West Peninsula as well as touches on some of the early detail around an 'exclusive M&A deal' which he's currently putting the finishing touches to.

First quarter 2019 production was down ( 602 bopd on average )
however Koot says this is a reflection of their strategy focusing on profit over production - particularly in the current lower oil price environment.

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https://www.oilcapital.com/companies/stocktube/13034/chariot-oil--gas-targets-lower-risk-growth-with-its-offshore-morocco-acquisition-13034.html Chariot Oil & Gas targets lower-risk growth with its offshore Morocco acquisition https://www.oilcapital.com/companies/stocktube/13034/chariot-oil--gas-targets-lower-risk-growth-with-its-offshore-morocco-acquisition-13034.html Wed, 17 Apr 2019 08:51:00 +0100 Chariot Oil & Gas plc (LON:CHAR) CFO Julian Maurice-Williams talks Proactive London's Andrew Scott through their 2018 results as well as their new asset acquisition offshore Morocco.

Chariot's picked up the Lixus licence which includes the already discovered Anchois gas project – comprising some 307bn cubic feet of contingent gas resources and more than 600bn cubic feet of additional resource upside potential via low-risk follow-up exploration.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30825/vsa-capital-market-movers---central-asia-metals-2018-full-year-results-30825.html VSA CAPITAL MARKET MOVERS - Central Asia Metals: 2018 Full Year Results https://www.oilcapital.com/columns/vsa-capital-market-movers/30825/vsa-capital-market-movers---central-asia-metals-2018-full-year-results-30825.html Wed, 17 Apr 2019 08:04:00 +0100

Central Asia Metals#: 2018 Full Year Results

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Robust Full Year Financials

Central Asia Metals (CAML LN) having delivered on production guidance for 2018 released robust full year results underpinned by the low cost base of the group. Revenue of US$192m was up 88% YoY while Kounrad unit costs of US$0.54/lb were up 4% YoY, in line with our forecast. Sasa unit costs were 5% higher YoY. The stronger top line and low cost base meant EBITDA was up 88% YoY to US$125m. Net income from continuing operations was up 48% YoY and with EPS up 8% YoY to 31 cents per share highlighting the accretive nature of the transaction. The full year dividend of 14.5p/sh. was 5% ahead of our estimate.

Ongoing Strong Free Cash Flow Generation

We anticipate copper output of 13.4kt in 2019 with lead and zinc production of 29.4kt and 22.5kt. Although we anticipate modest inflationary pressure from higher power and pumping costs at Kounrad and rising zinc treatment charges at Sasa we expect margins to remain strong with EBITDA of US$120m in 2019. With capital expenditure expected to drop to US$11.2m following the completion of the tailings facility at Sasa, in H1 2019, levered FCF is likely to increase 15% YoY in 2019F to US$84.6m enabling a dividend of 15.7p.sh.

Sasa Mine Review

Having integrated Sasa, management is now focused on enhancing the operational efficiencies via a life of mine review covering all aspects of operations. The first step of this was an updated resource statement which included an increase in lead and zinc grades as well as the conversion of 17% of Golema Reka into the higher Indicated category. This confirms the mine’s current 19 year life although drilling new areas in 2019 offers upside potential to the current resource.   

Reccomendation and Target Price

Although the shares are up 14% YTD, trading on a dividend yield of 6% and at a 12% discount to peers this highlights the ongoing value opportunity and we expect FCF generation to continue to increase in 2019F and 2020F.

We reiterate our Buy recommendation although adjust our target price to 300p which implies 21% upside and 28% on a total return basis.

 

 

 

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https://www.oilcapital.com/companies/stocktube/13014/buru-energy-enjoys-ungani-success-ahead-of-major-drilling-program-13014.html Buru Energy enjoys Ungani success ahead of major drilling program https://www.oilcapital.com/companies/stocktube/13014/buru-energy-enjoys-ungani-success-ahead-of-major-drilling-program-13014.html Tue, 16 Apr 2019 05:11:00 +0100 Buru Energy Limited (ASX:BRU) executive chairman Eric Streitberg updates Proactive Investors on the oil company's Ungani operations and its planned 2019 drilling program.
 
Favourable exchange movements have lifted the oil price to over $100 per barrel and the company is pushing ahead with a major drilling program in its Ungani Field project, having signed a more efficient rig.
 
Buru is also excited by its Butler prospect on the Lennard Shelf, which could drive an extensive exploration program over the rest of the year.
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https://www.oilcapital.com/companies/stocktube/12998/tlou-energy-advancing-discussions-with-botswana-investors-to-expand-field-operations-12998.html Tlou Energy advancing discussions with Botswana investors to expand field operations https://www.oilcapital.com/companies/stocktube/12998/tlou-energy-advancing-discussions-with-botswana-investors-to-expand-field-operations-12998.html Mon, 15 Apr 2019 09:24:00 +0100 Tony Gilby, managing director of Tlou Energy Limited (LON:TLOU) (ASX:TLOU), caught up with Proactive London's Andrew Scott following their AU$1.2mln premium priced placing.

Gilby says it's been welcome to see the confidence shown in the company by the two existing shareholders who took part in the raise.

He adds the additional capital removes perceived near-term financial pressure from the company.

The subscribing shareholders agreed to a voluntary 12-month escrow of the new shares, meaning they can’t be sold in the first year following the placing.

Meanwhile Tony adds that they're continuing discussions with Botswana based entities to fund expanded field operations and the first stage of above ground power generation infrastructure.

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https://www.oilcapital.com/companies/stocktube/12986/pulse-oil-planning-for-an-enhanced-recovery-program-at-flagship-bigoray-12986.html Pulse Oil planning for an enhanced recovery program at flagship Bigoray https://www.oilcapital.com/companies/stocktube/12986/pulse-oil-planning-for-an-enhanced-recovery-program-at-flagship-bigoray-12986.html Fri, 12 Apr 2019 14:19:00 +0100 Pulse Oil (CVE:PUL) President Drew Cadenhead and CEO Garth Johnson sat down with Steve Darling from Proactive Investors to talk about the work that was done this winter on their projects including their flagship Bigoray and how this set up the big works schedule for this summer.

Cadenhead and Johnson also telling Proactive what the company's plan looks like for the next couple of years.

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https://www.oilcapital.com/companies/stocktube/12982/mosman-oil--gas-delighted-with-positive-results-from-stanley-2-well-12982.html Mosman Oil & Gas delighted with positive results from Stanley-2 well https://www.oilcapital.com/companies/stocktube/12982/mosman-oil--gas-delighted-with-positive-results-from-stanley-2-well-12982.html Fri, 12 Apr 2019 13:20:00 +0100 John Barr, executive chairman of Mosman Oil And Gas Ltd (LON:MSMN), speaks to Proactive London after an agreement was reached on a completion plan to bring the recently drilled Stanley-2 well into production.

Barr says analysis of logs and cores from the well identified multiple potential production zones.

Data from two wells drilled at Stanley have been used in a detailed evaluation in order to optimise short-term oil production.

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https://www.oilcapital.com/companies/stocktube/12980/europa-oil--gas-nearing-news-on-irish-farm-outs-and-new-morocco-project-12980.html Europa Oil & Gas nearing news on Irish farm-outs and new Morocco project https://www.oilcapital.com/companies/stocktube/12980/europa-oil--gas-nearing-news-on-irish-farm-outs-and-new-morocco-project-12980.html Fri, 12 Apr 2019 12:14:00 +0100 Hugh Mackay, chief executive of Europa Oil & Gas Holdings plc (LON:EOG), elaborates on talks that are ongoing with a major international oil company over a potential farm-out - of interests in the LO 16/20 (which hosts Inishkea), FEL 1/17 (Edgeworth) and FEL 3/13 (Beckett, Shaw and Wilde) exploration areas - adding that he's confident a deal can be concluded in the coming months.

Mackay says such a deal would see Europa’s costs fully carried on a well for each area, and, the company would retain a “material” interest in the assets too.

Elsewhere, Europa's looking to Morocco for new opportunities.

It's presently in the final stages of discussions with ONHYM, the National Office of Hydrocarbons and Mines, to secure a petroleum agreement.

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https://www.oilcapital.com/companies/stocktube/12962/brookside-energy-building-cash-flow-engine-through-exposure-to-anadarko-basin-development-drilling-12962.html Brookside Energy building cash-flow engine through exposure to Anadarko Basin development drilling https://www.oilcapital.com/companies/stocktube/12962/brookside-energy-building-cash-flow-engine-through-exposure-to-anadarko-basin-development-drilling-12962.html Thu, 11 Apr 2019 03:28:00 +0100 Brookside Energy Ltd (ASX:BRK) managing director David Prentice updates Proactive Investors on four well development projects known as the Centaur Unit in the STACK Play in the Anadarko Basin, Oklahoma.
 
Two of these four development wells, in which Brookside holds a 0.3% working interest, have already reached projected total depth and are awaiting completion with the remaining two wells currently drilling.
 
These development wells are direct offsets to the successful Big Earl 6-15N-10W #1H well which recorded an IP24 of 1,540 barrels of oil equivalent per day.
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https://www.oilcapital.com/companies/stocktube/12945/touchstone-exploration---oil-capital-conference-march-2019-12945.html Touchstone Exploration - Oil Capital Conference March 2019 https://www.oilcapital.com/companies/stocktube/12945/touchstone-exploration---oil-capital-conference-march-2019-12945.html Wed, 10 Apr 2019 07:07:00 +0100 Touchstone Exploration Inc (LON:TXP, TSE:TXP) CEO Paul Baay presents at the Oil Capital Conference - March 2019.

For more information visit www.touchstoneexploration.com

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https://www.oilcapital.com/companies/stocktube/12944/cluff-natural-resources---oil-capital-conference-march-2019-12944.html Cluff Natural Resources - Oil Capital Conference March 2019 https://www.oilcapital.com/companies/stocktube/12944/cluff-natural-resources---oil-capital-conference-march-2019-12944.html Wed, 10 Apr 2019 07:06:00 +0100 Cluff Natural Resources PLC (LON:CLNR) CEO Graham Swindells presents at the Oil Capital Conference - March 2019.

For more information visit www.cluffnaturalresources.com

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https://www.oilcapital.com/companies/stocktube/12943/valeura-energy-inc---oil-capital-conference-march-2019-12943.html Valeura Energy Inc - Oil Capital Conference March 2019 https://www.oilcapital.com/companies/stocktube/12943/valeura-energy-inc---oil-capital-conference-march-2019-12943.html Wed, 10 Apr 2019 07:05:00 +0100 Valeura Energy Inc (TSX:VLE) CEO Sean Guest presents to investors at the Oil Capital Conference in London - March 2019.

For more information visit www.valeuraenergy.com

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https://www.oilcapital.com/companies/stocktube/12942/petro-matad-limited---oil-capital-conference-march-2019-12942.html Petro Matad Limited - Oil Capital Conference March 2019 https://www.oilcapital.com/companies/stocktube/12942/petro-matad-limited---oil-capital-conference-march-2019-12942.html Wed, 10 Apr 2019 07:04:00 +0100 Petro Matad Limited (LON:MATD)  CEO Mike Buck presents to investors at the Oil Capital Conference - March 2019.

For more information visit www.petromatadgroup.com

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https://www.oilcapital.com/companies/stocktube/12929/egdon-resources-pleased-with-resolution-resource-as-it-looks-for-partner-12929.html Egdon Resources pleased with Resolution resource as it looks for partner https://www.oilcapital.com/companies/stocktube/12929/egdon-resources-pleased-with-resolution-resource-as-it-looks-for-partner-12929.html Tue, 09 Apr 2019 13:42:00 +0100 Mark Abbott, Managing Director of Egdon Resources Plc (LON:EDR), speaks to Proactive London's Andrew Scott after announcing their interim results for the six months to January 2019.

An independent assessment by Schlumberger has reported resources at Egdon's Resolution prospect in the southern North Sea of around 206 billion cubic feet of gas.

Abbott says they're now looking to extend the licence and carry out a 3D seismic survey later this year at both Resolution and its Endeavour discovery in the neighbouring block.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30802/vsa-capital-market-movers---morning-agri-comment-090419-30802.html VSA CAPITAL MARKET MOVERS - Morning Agri Comment, 09/04/19 https://www.oilcapital.com/columns/vsa-capital-market-movers/30802/vsa-capital-market-movers---morning-agri-comment-090419-30802.html Tue, 09 Apr 2019 08:18:00 +0100

VSA Morning Agri Comment, 09/04/19

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DekelOil# - Q1 Production & Sales Update

Côte d'Ivoire agricultural company DekelOil Public Limited (LON:DKL) has announced a production update for Q1 2019.

  • Fresh Fruit Bunches (FFB) Collected: 69,340t*, +16.5% YoY (Q1 2018: 59,531t)
  • Crude Palm Oil (CPO) Production: 14,921t, +9.7% YoY (Q1 2018: 13,605t)
  • CPO Extraction Rate: 21.8% (Q1 2018: 22.7%)
  • CPO Sales: 12,009t, -12.7% YoY (Q1 2018: 13,758t)
  • Average CPO Selling Price: €520/t, -5.1% YoY (Q1 2018: €548/t)

*1,050t of this total was not processed during quarter.

VSA Comment

Following last year’s disappointing harvest levels, we were hopeful of increased FFB volumes in H1. DKL has now confirmed this is indeed the case for Q1 at least, which was the second highest ever Q1 in terms of FFB collected (c.4% below FY 2017). DKL reports that its market share remained stable during the period, supporting the forecasted climate-based recovery in production levels across the region, as opposed to any market share gain. 

Encouragingly, commentary from management suggests this trend will continue into Q2. Having produced 8,637t of CPO in Q2 2018, we are hopeful of a significantly improved result this year and look forward to confirmation of this when the company releases its FY 2018 results in June.

DKL recorded a lower extraction rate than normal in the quarter due to lower levels of oil content in the FFB delivered to its mill, a trend which management believes was also seen by local competitors.    

Based on our quarterly tracking data, we believe DKL carried over c.3,600t of CPO into Q2 (c.€2m of revenues at the average Q1 selling price). Indeed, DKL confirms in this morning’s update that sales of 2,240t, for which cash was received during the quarter before customer collection had occurred, were recognised shortly after the period end. Including these sales in the Q1 figures would have delivered a c.1% increase in CPO sales compared with a similarly adjusted Q1 2018 figure, as opposed to the c.13% decrease reported.

It is also positive to note that DKL reports that the price paid to smallholders for FFB is normalising. This was a significant issue last year, as competition from mills was high, as a result of the lower harvest. With more normal trading conditions, this suggests the company’s gross margin is back at the mid-to-high 20s, which the company recorded in each of FY 2015, FY 2016 and FY 2017.

With FFB collection and CPO production accounting for c.40% of FY production historically, DKL appears to be trading c.3% off our FY 2019 FFB harvest forecast (177,441t) and c.9% off our FY 2019 CPO production forecast (40,102t) at this point. However, we are hopeful that a more normalised extraction rate and a stronger Q2 can move this run-rate back towards our forecasts. 

Impressively, for the ninth quarter in a row DKL has achieved an average selling price in-line with, or at a premium to the European benchmark CPO price. We remain bullish on CPO pricing for 2019 given that efforts to increase biodiesel consumption in South East Asia are now finally starting to have an impact on domestic consumption levels (and can now be seen in the data). In Indonesia, implementation of B30 (30% palm-based biodiesel blended with traditional diesel) has now been brought forward to start towards the end of this year.

Successful implementation of B30 could add an extra 3-4 million tonnes to the country’s domestic consumption levels, offsetting a large proportion of the total palm oil consumed in the EU for biofuel. Even if the EU does phase out palm oil as a feedstock for biodiesel by 2030, alternative sources of edible oil will need to be found to replace this, leaving a gap elsewhere, which the lowest cost edible oil, palm oil, would logically replace.

In addition, we believe that due to the massively underreported african swine fever outbreak in China, demand for soymeal will reduce and thus reduce the amount of soybean oil ‘by-product’ that is produced from the crushing of soybeans for animal feed. This should also be bullish for the edible oil pricing complex in the near-to-medium term and perhaps encourage additional Chinese purchases of palm oil as a result.

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

Harvest Minerals

12.73

6.85

0.50

+7.9%

Sirius Minerals

1,059.19

22.08

1.08

+5.1%

DekelOil

11.63

3.30

0.10

+3.1%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Devro

304.07

182.20

(3.60)

-1.9%

Wynnstay Group

57.91

293.00

(4.50)

-1.5%

Cranswick

1,456.16

2,818.00

(36.00)

-1.3%

 

 

 

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https://www.oilcapital.com/companies/stocktube/12919/sdx-energy-sets-timeline-for-tsx-delisting-and-provides-update-on-south-disouq-12919.html SDX Energy sets timeline for TSX delisting and provides update on South Disouq https://www.oilcapital.com/companies/stocktube/12919/sdx-energy-sets-timeline-for-tsx-delisting-and-provides-update-on-south-disouq-12919.html Mon, 08 Apr 2019 15:58:00 +0100 SDX Energy (CVE:SDX-LON:SDX) President and CEO Paul Welch joined Proactive Investors Steve Darling on Skype to update the timing of their delisting from the Toronto Stock Exchange and solely list on the AIM market in London.

Welch also providing Proactive with an update on their South Disouq Project in Egypt. Welch saying the final commercial terms of the EPF have yet to be agreed and need to be in place by a certain date to proceed as planned.

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https://www.oilcapital.com/columns/the-pay-zone/30800/oil-price-sdx-energy-genel-energy-and-finally-30800.html Oil price, SDX Energy, Genel Energy And finally… https://www.oilcapital.com/columns/the-pay-zone/30800/oil-price-sdx-energy-genel-energy-and-finally-30800.html Mon, 08 Apr 2019 13:58:00 +0100 Oil price, SDX Energy, Genel Energy And finally…

 

 

WTI $63.08 +98c, Brent $70.34 +94c, Diff -$7.26 -4c, NG $2.66 +2c

Oil price

Oil was up last week, WTI rose $2.94 and Brent firmed by $2.76, breaking the elusive close above $70 level despite the US inventory number and the rig count. The latter was up 19 units overall to 1025 and in oil by 15 to 831 which would indicate an early warning of higher US production but it’s not quite as black and white as that.

The good news overwhelmed the bad, the US jobs data showed a rise of 196/- for March possibly making the February number an oddity and of course my own favourite lead indicator, US gasoline prices continue to rise dramatically. So GDP worries are lessened and with supplies tightening significantly (usual suspects, Venezuela, Iran, Libya…) the outlook for Q2 remains quietly bullish.

SDX Energy

SDX has announced that it has an agreement to cancel its TSX-V listing by swapping UK shares for Canadian shares on a one-for-one basis. This will cut costs, give better liquidity and be more attractive for investing institutions who prefer to deal in London.

The company has also warned that the start up of South Disouq may be delayed, the mid 2019 target is based on an Early Production Facility going hand in glove with the Central Processing Facility which, believe it or not, requires separate commercial deals between all parties.  The wells are all drilled and the pipeline is connected but the discussions are taking a little longer than expected.

With the peak season for gas in the July-September window the authorities have every incentive to deliver in the best interests of the country but there are always some small points to clarify. I get the impression from the company that they are taking the hit now and flagging up a potential delay so that it does not look really bad if it was announced at the last minute which is eminently sensible.

The deal is a transformational one for the company and this delay will not alter the value to them but it is understandable that investors, who have watched the progress of the work for so long should be impatient at the hold-up.

Genel Energy

Genel has announced that Murat Özgül is to step down from the board with immediate effect and that Bill Higgs is to succeed him as CEO. Murat will stay on as a special advisor to the board reflecting the importance of his influence and help at board level for so long.

Bill Higgs is undoubtedly the best person to take over the reins and the succession process can be seen to have worked, indeed the fact that CFO Esa Ikaheimonen has also joined the board is further good news. This team, led by Bill will be the right one to take Genel up to the next level, he is not short of ambition having told me that he hoped to ‘double the size of the company in the not too distant future’. I recently interviewed Bill and have added the link below for those who may like to take another look.

With a technical problem causing the blog to be delayed this morning I can now fit in the announcement that following a bondholder meeting this morning a waiver of the dividend restriction in 2019 has been confirmed. The board has recommended a final divvi of 10c per share or $27.9m and next year will be at least $40m and split between interim and final. Accordingly a 5c payout is planned for the interim announcement in August.

Core Finance CEO interview: Bill Higgs of Genel Energy

And finally…

The boat race was won by Cambridge who also won the womens and the reserve crew races, although the light blues started well, the race which can often be over by Barnes Bridge, was very competitive.

The FA Cup Final will be between the Noisy Neighbours who are still on for the quadruple, and the Hornets who beat Wolves in a right tussle.

In the Premiership Liverpool kept the pressure on by winning 1-3 at the Saints but the Gooners were slightly blown off course by losing at the resurgent Toffees 1-0. Tonight it’s the London derby when the Irons visit Stamford Bridge.

Tiger Roll duly obliged in the Grand National and could still win again, or a Gold Cup or anything at the moment.

 

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https://www.oilcapital.com/companies/stocktube/12908/eco-atlantic-s-gil-holzman-welcomes-strong-investor-interest-in-us17mln-fundraise-12908.html Eco Atlantic's Gil Holzman welcomes strong investor interest in US$17mln fundraise https://www.oilcapital.com/companies/stocktube/12908/eco-atlantic-s-gil-holzman-welcomes-strong-investor-interest-in-us17mln-fundraise-12908.html Mon, 08 Apr 2019 10:04:00 +0100 Gil Holzman, chief executive of Eco Atlantic Oil & Gas Ltd (LON:ECO) (CVE:EOG), speaks to Proactive London's Andrew Scott after raising US$17mln of new funds to cover its participation in a possible expansion to the exploration drilling campaign offshore Guyana.

Eco will now be able to fund its share of up to four additional exploration or development wells, perhaps indicating confidence among the joint venture partners ahead of the first phase of wells.

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https://www.oilcapital.com/companies/stocktube/12852/chariot-oil--gas-expands-morocco-footprint-with-new-lixus-licence-12852.html Chariot Oil & Gas expands Morocco footprint with new Lixus licence https://www.oilcapital.com/companies/stocktube/12852/chariot-oil--gas-expands-morocco-footprint-with-new-lixus-licence-12852.html Wed, 03 Apr 2019 13:33:00 +0100 Chariot Oil & Gas Limited (LON:CHAR) shares rose on Wednesday as the energy explorer enlarged its footprint off ther Moroccan coast, with the award of the new Lixus licence. Chariot CEO Larry Bottomley tells Proactive London  about the next steps in developing the asset as well as how it fits into the rest of the company portfolio.
The AIM-listed group owns 75% of Lixus alongside state-backed partner ONHYM (Office National des Hydrocarbures et des Mines) which holds the other 25%. News here too on what shareholders can expect over the coming few months.

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https://www.oilcapital.com/companies/stocktube/12849/new-tech-expected-to-enhance-curzon-energy-s-texas-gas-project-12849.html New tech expected to enhance Curzon Energy's Texas gas project https://www.oilcapital.com/companies/stocktube/12849/new-tech-expected-to-enhance-curzon-energy-s-texas-gas-project-12849.html Wed, 03 Apr 2019 12:45:00 +0100 Curzon Energy PLC (LON:CZN), the US-based natural gas project developer, is to proceed with its planned participation in Pared’s Texas Gas Project alongside contiuing to progress its Oregon interest. CEO Scott Kaintz tells Proactive London how the Texas piece fits into Curzon's overall strategy and what investors need to pick up from the drill program news.
The company signed with Pared last year on a joint development plan and after appraising the project the company has decided now to pull the trigger.

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https://www.oilcapital.com/companies/stocktube/12832/polar-power-sees-big-opportunities-for-its-systems-in-the-residential-market-12832.html Polar Power sees big opportunities for its systems in the residential market https://www.oilcapital.com/companies/stocktube/12832/polar-power-sees-big-opportunities-for-its-systems-in-the-residential-market-12832.html Tue, 02 Apr 2019 15:50:00 +0100 Raj Masina from Polar Power Inc (NASDAQ:POLA) sat down with Proactive Investors at the Spring Investor Summit 2019 in New York City.

Polar designs, manufactures and sells direct current (DC) power systems for applications in the telecommunications, military, EV charging and uninterruptible power supply markets in the US and internationally.

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https://www.oilcapital.com/columns/the-pay-zone/30784/oil-price---trinity-rockhopper-pantheon-30784.html Oil Price - Trinity, Rockhopper, Pantheon https://www.oilcapital.com/columns/the-pay-zone/30784/oil-price---trinity-rockhopper-pantheon-30784.html Tue, 02 Apr 2019 12:13:00 +0100 Trinity, Rockhopper, Pantheon

 

 

Trinity Exploration & Production

A cracking set of figures from Trinity this morning shows the company firing on all cylinders, beating short term production forecasts and on target to achieve medium term goals.

With high oil prices giving average realised prices of nearly $60 and production by the year end of over 3,000 bopd the adjusted EBITDA was up 51% to $19.2m and margins were 31% or $18.3/bbl. With a break even price of below $30/bbl Trinity is looking like a very attractive play in terms of enterprise value.

The raise ensured all debt paid off and provides funds for the onshore drilling campaign. 2P reserves overall were up 6% with pride of place going to the onshore number up 26% which is highly impressive after the increase in production . Production for the year was 2,871 bopd, up 14% after 8 new onshore wells, 17 recompletions and an increase in active offshore producing wells including a continuous campaign of workovers and reactivations.

As for production targets TRIN are expecting an increase of 10% and with the optimism emanating from the TGAL Area development plan which has the potential to ‘achieve a step change in production and value for the company as we target our medium term production goal of 7,500 bopd’. The company also slip in to the RNS that they are well placed to take advantage of any suitable inorganic growth opportunities that may arise, no Chinese education plays here but they may present the odd chance…….

Chairman Bruce Dingwall is unsurprising upbeat, after a ‘significant ‘ year and a low-cost work programme funded by a strengthening balance sheet Trinity ‘faces the future with a growing confidence ‘, I’m not surprised, Trinity is in great shape and looking good for the future, the shares are ridiculously cheap.

Rockhopper

A business as usual statement from RKH this morning on the financial front, good cash flow which covers G&A costs and $40.4m of cash and no debt.

The best news comes from progress being made on the Sea Lion Phase 1 development where FEED has been completed, the contractor LOI’s progress to full agreements is well advanced and the FDP and EIA’s are at a final stage with the FI Government. With the finance structure also progressing there is further good news, the vendor financing has been agreed to the tune of $400m worth of funding for the project. Of most interest must be the PIM submission, this is the Project Information Memorandum and is the formal document for the debt application which is expected to be submitted in Q2 2019 and is a key milestone.

Elsewhere all is as expected, arbitration continues, the Greater Mediterranean continues to deliver successfully. All now depends on the last remaining milestone as described by CEO Sam Moody and then Sea Lion can move to the development stage when ever patient shareholders can reap their reward.

Pantheon Resources

After the build up to the Alkaid appraisal well the news that the existing discovery was confirmed pleased investors, today’s news will not. Finding the West Sak secondary target water wet will be a major disappointment and given that the bad result effectively voids the chances for success in the Ugnu formation this is truly a horrible double whammy.

The company remains upbeat about the Brookian zone which flowed 80-100 bopd and hope that with a horizontal well will deliver ‘significantly higher rates’. This is clearly a massive setback and as the company says will now rework and analyse all key data from the Alaska programme. Who would have thought that so soon after backing into Alaska,  Pantheon would be going back to East Texas with a view to re-drilling VOBM-1?

 

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https://www.oilcapital.com/companies/stocktube/12821/canadian-overseas-petroleum-now-poised-for-production-in-the-niger-delta-12821.html Canadian Overseas Petroleum now poised for production in the Niger Delta https://www.oilcapital.com/companies/stocktube/12821/canadian-overseas-petroleum-now-poised-for-production-in-the-niger-delta-12821.html Tue, 02 Apr 2019 10:27:00 +0100 Arthur Millholland, chief executive of Canadian Overseas Petroleum Limited (LON:COPL) tells Proactive London how his team's sheer hard work and patience over the last two years in Nigeria has now brought his company to a point where substantial progress is imminent. Millholland, whose experience in the UK North Sea means he's more than excited about the company's exploration finally leading to oil production, tells Proactive about a new jack rig he's managed to line up for the asset offshore west Africa.
Updates for investors here too on the company's numerous discovery wells and the data they'll be working with along with the telling comment that COP are now just about to launch into 'the fun bit'. 

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https://www.oilcapital.com/companies/stocktube/12804/qs-energy-inc-advancing-the-commercialization-of-its-aot-technology-12804.html QS Energy Inc advancing the commercialization of its AOT technology https://www.oilcapital.com/companies/stocktube/12804/qs-energy-inc-advancing-the-commercialization-of-its-aot-technology-12804.html Mon, 01 Apr 2019 16:55:00 +0100 QS Energy Inc (OTCMKTS:QSEP) Chief Financial Officer Michael McMullen and CEO Jason Lane joined Proactive Investors at the Spring Investor Summit in New York City.

The company’s patented Applied Oil Technology is a solid-state turn-key system that uses an electric field to reduce crude-oil viscosity.

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https://www.oilcapital.com/companies/stocktube/12790/ceres-power-on-track-to-see-full-year-revenues-more-than-double-12790.html Ceres Power on track to see full year revenues more than double https://www.oilcapital.com/companies/stocktube/12790/ceres-power-on-track-to-see-full-year-revenues-more-than-double-12790.html Fri, 29 Mar 2019 16:04:00 +0000 Phil Caldwell, chief executive of Ceres Power Holdings PLC (LON:CWR), speaks to Proactive London's Andrew Scott after recently announcing their half-year results to December 2018.

Caldwell says full year revenue and other operating income's on track to more than double for the fourth successive year to more than £15 million.

Ceres is the brains behind the SteelCell, a low-cost, next-generation fuel cell, which is in its fifth iteration.

The firm has deals with Robert Bosch and Chinese engineering giant, Weichai - field trials have begun with large manufacturers, while there is a healthy pipeline of potential partners at the evaluation stage.

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https://www.oilcapital.com/companies/stocktube/12789/valeura-energy-to-list-in-london-as-it-looks-to-grow-resource-base-and-production-in-turkey-12789.html Valeura Energy to list in London as it looks to grow resource base and production in Turkey https://www.oilcapital.com/companies/stocktube/12789/valeura-energy-to-list-in-london-as-it-looks-to-grow-resource-base-and-production-in-turkey-12789.html Fri, 29 Mar 2019 14:26:00 +0000 Toronto-listed Valeura Energy (TSX:VLE) is to get a second listing in London after strong UK institutional support for a fund raising last year.

Valeura is drilling to prove up a potentially huge gas play in north-west Turkey that might hold as much as 10trn cubic feet of natural gas.

Equinor, the former Statoil, is its partner on the field with handily Valeura owning all the local gas infrastructure as well.

A first development well hit a massive 1,600m gas column. Results from the second well are due next month.

It's a very exciting time for Valeura, chief executive Sean Guest told Proactive.

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https://www.oilcapital.com/companies/stocktube/12787/aminex-plc-ceo-updates-on-ruvuma-farm-out-in-tanzania-12787.html Aminex PLC CEO updates on Ruvuma farm-out in Tanzania https://www.oilcapital.com/companies/stocktube/12787/aminex-plc-ceo-updates-on-ruvuma-farm-out-in-tanzania-12787.html Fri, 29 Mar 2019 12:51:00 +0000 Jay Bhatacherjee, chief executive of Aminex PLC (LON:AEX) discusses with Proactive London's Andrew Scott the ongoing efforts to close the proposed farm-out for the Ruvuma asset in Tanzania.

He says the completion is conditional upon the receipt of certain approvals – including joint venture partner approvals and regulatory approvals from Tanzania government departments.

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https://www.oilcapital.com/companies/stocktube/12785/ghr-acquisition-to-have-profound-earnings-implications---simec-atlantis-ceo-12785.html GHR acquisition to have profound earnings implications - SIMEC Atlantis CEO https://www.oilcapital.com/companies/stocktube/12785/ghr-acquisition-to-have-profound-earnings-implications---simec-atlantis-ceo-12785.html Fri, 29 Mar 2019 10:28:00 +0000 Tim Cornelius, SIMEC Atlantis PLC’s (LON:SAE) chief executive  expects the acquisition of Green Highland Renewables to complete next month and add to earnings almost immediately.

Atlantis is to raise at least £5mln through a placing and crowdfunding offer to pay the initial consideration for GHR, which will have an immediate impact on the business.

Elsewhere, the Uskmouth waste to power project is making good progress with a first plant to make pellets to fuel the power station to be commissioned shortly.

At MeyGen in the Pentland Firth, Atlantis will also apply for funding from the Scottish Government’s new tidal power support initiative.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30769/vsa-capital-market-movers---egdon-resources-plc-30769.html VSA CAPITAL MARKET MOVERS - Egdon Resources plc https://www.oilcapital.com/columns/vsa-capital-market-movers/30769/vsa-capital-market-movers---egdon-resources-plc-30769.html Thu, 28 Mar 2019 09:17:00 +0000

VSA Morning Flow Test, 28/03/19

Click here for PDF version

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

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Egdon Resources Plc (LON:EDR

Egdon Resources plc (EDR LN) has reiterated an update by the operator IGAS Energy plc (IGAS LN), regarding the Springs Road-1 (SR-01) well in which it holds a 14.5% interest.

IGAS reports that SR-01 reached a total depth of 3,500 meters and encountered the intended targets, the Bowland Shale, the Millstone Grit and the Arundian Shales.  As previously reported on 11 March 2019, preliminary analysis showed a hydrocarbon bearing shale of over 250 meters was encountered within the upper and lower Bowland Shale.  Further significant quantities of gas were observed in the Millstone Grit, Arundian Shale and lower Bowland Shale.

Petrophysical and core analysis is currently being conducted and are due for completion results are expected in Q2 2019. These results have broader significance for EDR which holds a net 82,000 acres in the Gainsborough Trough. Positive results from Springs Road would open up the play providing a catalyst for a potential rerating of the shares which remain deeply undervalued, in our view. Our conservative valuation approach based on prior transactions for UK shale US$787/acre results in a risked NAV/sh. value for the Gainsborough Trough exposure of 5.9p/sh out of our total EDR shale acreage valuation of 13.5p/sh. This, in our view, is clearly not reflected in the current share price.

We reiterate our Buy recommendation and 46.7p target price.

 

 

 

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https://www.oilcapital.com/companies/stocktube/12752/touchstone-exploration-gearing-up-to-spud-first-ortoire-well-in-june-12752.html Touchstone Exploration gearing up to spud first Ortoire well in June https://www.oilcapital.com/companies/stocktube/12752/touchstone-exploration-gearing-up-to-spud-first-ortoire-well-in-june-12752.html Wed, 27 Mar 2019 16:08:00 +0000 Touchstone Exploration Inc's (LON:TXP, TSE:TXP) Paul Baay and James Shipka update Proactive London's Andrew Scott on their 2018 results as well as the year ahead's exploration and development plans.

Production for the 12-month period averaged a rate of 1,718 barrels of oil per day, up 25% from 1,375 bopd in 2017.

So far this year Touchstone's reported oil sales of 1,994 barrels of oil per day in January and an increase to 2,179 bopd in February.

The company's now looking at growth through exploration - namely the Ortoire Block, where they're looking to spud their first well in June this year.

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https://www.oilcapital.com/companies/stocktube/12751/inspired-energy-accelerates-next-growth-phase-and-delivers-record-revenues-12751.html Inspired Energy accelerates next growth phase and delivers record revenues https://www.oilcapital.com/companies/stocktube/12751/inspired-energy-accelerates-next-growth-phase-and-delivers-record-revenues-12751.html Wed, 27 Mar 2019 15:48:00 +0000 Inspired Energy plc’s (LON:INSE) chief executive Mark Dickinson talks Proactive London's Andrew Scott through the company's 2018 highlights  - a busy year which saw five acquisitions and sustained organic growth.

Dickinson says its corporate division enjoyed record revenues growing 34% to £27.3mln, accounting for 84% of group revenue.

He adds that 2019's got off to an encouraging start and is looking forward to another year of 'significant growth'.

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https://www.oilcapital.com/columns/the-pay-zone/30764/oil-price-echo-energy-touchstone-exploration-getech-and-finally-30764.html Oil price, Echo Energy, Touchstone Exploration, Getech And finally… https://www.oilcapital.com/columns/the-pay-zone/30764/oil-price-echo-energy-touchstone-exploration-getech-and-finally-30764.html Wed, 27 Mar 2019 10:56:00 +0000 Oil price

As I wrote yesterday oil was back on the bullish trail with the blackouts in Venezuela stopping any crude oil sales and it’s not getting better. The API stats, whilst not always on the same page as the EIA showed an unexpected build in crude of 1.9m barrels but yet again products drew big time, gasoline drew 3.5m and distillates 4.3m barrels respectively.

Echo Energy

An operational update from Echo this morning ahead of results late April. Total production from Fracción C and D was 315,825 boe at a daily rate of 865 boed of which 31% was oil which sold for an average price of $63.80 and gas which raised $3.99 per mmbtu. Echo are discussing the intervention programme at Canadon Salto field with partners but there won’t be any work in Q1.

1H 2019 was always going to be quiet in terms of announcements for Echo but operationally much is happening, at the key Tapi Aike prospect  the first seismic is being processed and the second cube being accumulated, later in the year there will be decisions to be made on well locations and then an exploration well.

Touchstone Exploration

2018 results for Touchstone but as always most of the information is already in the public domain. The company did achieve its target of 2,000 b/d and with a very creditable rise of 53% in its operating netback at $34.58 and crept from a loss to a small profit. Much depends now on its drilling campaign on the Ortoire Block which will to a large extent dictate how this year is going to go.

Getech

A pre-close season update from Getech this morning and whilst they acknowledge that customer budgets ‘remain constrained’ it is a pretty good statement overall. Revenue was up 11% and profits rose 33% as they helped their customers ‘with their most pressing needs’. Products made the lions share of the profits, up 24% as services fell but cost savings of another £0.5m are expected and EBITDA adjusted for restructuring should be £1.2m (£0.9). Whilst it is not all plain sailing in some markets GTC are making a very good job of the restructuring and re-balancing process and should be commended for these figures.

And finally…

With the international break over we now have a scarcity of sporting action rarely seen by and finally. So sit down and enjoy St Johnstone v St Mirren and restore your faith in Scottish football…..

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https://www.oilcapital.com/companies/stocktube/12746/eco-atlantic-boss-excited-ahead-of-high-impact-fully-funded-wells-offshore-guyana-12746.html Eco Atlantic boss excited ahead of high impact, fully funded wells offshore Guyana https://www.oilcapital.com/companies/stocktube/12746/eco-atlantic-boss-excited-ahead-of-high-impact-fully-funded-wells-offshore-guyana-12746.html Wed, 27 Mar 2019 09:48:00 +0000 Gil Holzman, chief executive of Eco Atlantic Oil & Gas Ltd (LON:ECO) (CVE:EOG), caught up with Proactive London's Andrew Scott following the updated CPR on its Orinduik Block, offshore Guyana.

Consultant Gustavson Associates has estimated some 3.98bn barrels in prospective resources across 15 exploration areas, which for Eco’s 15% stake in Orinduik, equates to 597.3mln barrels net to the AIM-quoted firm.

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https://www.oilcapital.com/companies/stocktube/12722/whitebark-energy-raises-nearly-2-million-to-develop-rex-1-oil-discovery-12722.html Whitebark Energy raises nearly $2 million to develop Rex-1 oil discovery https://www.oilcapital.com/companies/stocktube/12722/whitebark-energy-raises-nearly-2-million-to-develop-rex-1-oil-discovery-12722.html Tue, 26 Mar 2019 04:42:00 +0000 Whitebark Energy Ltd (ASX:WBE) managing director David Messina updates Proactive Investors on the oil company's recent share placement to rapidly advance its Rex-1 discovery well in Canada. 
 
A total of $1.95 million was raised which will be used for production facilities and drilling programs at Rex-1 within the Wizard Lake Oil Pool Project, housed in the Point Loma joint venture with partner Point Loma Resources Ltd (CVE:PLX).
 
Development work will include pipeline construction, equipment installation and drilling, with commercial production at Rex-1 anticipated in April.
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https://www.oilcapital.com/companies/stocktube/12698/solo-oil-reveals-plans-to-acquire-its-way-to-5000-barrels-of-production-per-day-12698.html Solo Oil reveals plans to acquire its way to 5,000 barrels of production per day https://www.oilcapital.com/companies/stocktube/12698/solo-oil-reveals-plans-to-acquire-its-way-to-5000-barrels-of-production-per-day-12698.html Fri, 22 Mar 2019 10:45:00 +0000 Solo Oil PLC’s (LON:SOLO) executive chairman Alastair Ferguson discusses with Proactive London their acquisitive new strategy for growth.

Ferguson says they're aiming to build a portfolio of new assets capable of producing some 5,000 boepd within three years.

This fundamental change in approach will give the company greater control over the outcome of its investment decisions.

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https://www.oilcapital.com/companies/stocktube/12696/block-energy-to-begin-flow-testing-at-its-west-rustavi-well-16a-12696.html Block Energy to begin flow testing at its West Rustavi Well 16a https://www.oilcapital.com/companies/stocktube/12696/block-energy-to-begin-flow-testing-at-its-west-rustavi-well-16a-12696.html Fri, 22 Mar 2019 09:56:00 +0000 Block Energy Plc's (LON:BLOE) Paul Haywood discusses with Proactive London's Andrew Scott the the completion of drilling in the West Rustavi Well 16a, which encountered significant oil and gas shows.

''This is by far one of the most exciting events the company's had so far ... everybody's really focused and excited to see what we get from this one''.

16a reached a total drilled depth of 2,659 metres, following successful horizontal sidetracking operations.

Significant oil and gas shows were observed in the upper and middle Eocene formations.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30741/vsa-capital-market-movers---bacanora-lithium-30741.html VSA CAPITAL MARKET MOVERS - Bacanora Lithium https://www.oilcapital.com/columns/vsa-capital-market-movers/30741/vsa-capital-market-movers---bacanora-lithium-30741.html Thu, 21 Mar 2019 09:31:00 +0000

VSA Morning Miner, 21/03/19

Click here for PDF version

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Bacanora Lithium (LON:BCN)

We note the update in relation to Zinnwald and Deutsche Lithium (50% owned by Bacanora Lithium (BCN LN)) where an additional exploration license of 42km2 has been granted to the company. The initial license area of just 2.56km2 along with an additional 2.95km2 at Falkenhaim, 5km away, means this is a significant expansion in the project area since this license area surrounds entirely the existing licenses.
Based on the previously defined resource of 757kt contained lithium carbonate equivalent we attributed a value of £38m using a peer based EV/resource metric implying 10p/sh.  A feasibility study remains on track for Q2 2019 and exploration of the additional license area could result in an extension of mine life to that defined in the FS. Given the proximity of the licenses and the reported geological similarity given historic workings for tin, tungsten and lithium across both areas there is potential for this to be fulfilled, in our view.

BCN is planning to produce a lithium fluoride product at Zinnwald, which is one of the most valuable lithium products with recent pricing indicated at around US$22,000/t and could be used by the local German chemical industry.

We also note the announcement in relation to recent price volatility and the changes to the share register prompted by investment strategy revisions at Blackrock and Capital Group. With this technical selling now indicated to be complete we expect stronger support for the stock ahead from a trading perspective. However, the fundamentals of the stock remain unchanged with Sonora remaining a highly attractive asset which is deeply undervalued, in our view.

We reiterate our Buy recommendation and 115p/ sh. target price.

Please click here for our initiation note.
 

 

 

 

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https://www.oilcapital.com/companies/stocktube/12670/genex-power-uses-solar-hydro-combination-to-enhance-renewable-offering-12670.html Genex Power uses solar-hydro combination to enhance renewable offering https://www.oilcapital.com/companies/stocktube/12670/genex-power-uses-solar-hydro-combination-to-enhance-renewable-offering-12670.html Thu, 21 Mar 2019 01:25:00 +0000 Genex Power Ltd (ASX:GNX) executive director Simon Kidston speaks to Proactive Investors about the renewable energy company's hybrid solar-hydro energy solution.
 
The company has used an old open pit mine to add an integrated pump storage hydro project to its solar farm, effectively creating what Kidston calls a "water battery".
 
The combination addresses the problem of storing energy generated by solar farms and has helped drive Genex to a strong cash position. 
 
While its current operations are Queensland based - Genex Power has a contract with the Queensland government - the company is soon set to expand its offering to New South Wales.
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https://www.oilcapital.com/companies/stocktube/12664/dxi-energy-announces-results-of-first-well-at-woodrush-project-12664.html DXI Energy announces results of first well at Woodrush project https://www.oilcapital.com/companies/stocktube/12664/dxi-energy-announces-results-of-first-well-at-woodrush-project-12664.html Wed, 20 Mar 2019 18:58:00 +0000 DXI Energy (CVE:DXI-OTCQB:DXIEF) Chairman Bob Hodgkinson sat down with Steve Darling from Proactive Investors Vancouver to share results from initial drilling program at the Woodrush project in Northeast BC.

Hodgkinson telling Proactive what they found so far and also what the next steps will be on the project.
 

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https://www.oilcapital.com/companies/stocktube/12656/88-energy-s-chief-expects-icewine-farm-out-in-a-matter-of-weeks-12656.html 88 Energy's chief expects Icewine farm-out in a matter of weeks https://www.oilcapital.com/companies/stocktube/12656/88-energy-s-chief-expects-icewine-farm-out-in-a-matter-of-weeks-12656.html Wed, 20 Mar 2019 10:06:00 +0000 88 Energy Ltd (LON:88E) managing director Dave Wall tells Proactive London's Andrew Scott they're closer to a deal in a farm-out process to bring a partner into the exploration of conventional prospects in the Project Icewine area.

Wall says a ‘preferred bidder’ has now been selected in the process, which launch last August, and, negotiations over a potential deal are now taking place.

He also discusses the recent Winx-1 exploration well disappointment as well as efforts to bring a partner into the HRZ shales discovery.

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https://www.oilcapital.com/columns/the-pay-zone/30732/oil-price-eco-atlantic-range-resources-and-finally-30732.html Oil price, Eco Atlantic, Range Resources And finally… https://www.oilcapital.com/columns/the-pay-zone/30732/oil-price-eco-atlantic-range-resources-and-finally-30732.html Mon, 18 Mar 2019 15:38:00 +0000 WTI $58.52 -9c, Brent $67.16 -7c, Diff -$8.64 +2c, NG $2.80 -6c

Oil price

Last week oil remained strong, WTI gained $2.45 whilst Brent rose $1.42 as markets steadied and confidence was restored. The Saudi Oil Minister, Khalid al Falih stated that he believed that Opec+ will commit to current quotas at their meeting next month and that they will last for the rest of the year.

Friday’s rig count showed a fall of 1 unit overall to 1026 and also down by 1 in oil to 833.

Eco (Atlantic) Oil and Gas Ltd

Eco Atlantic has published an updated CPR on Orinduik this morning following completion of 3D processing and an additional six months of interpretation work. The result is an increase in Gross Prospective Resources P50 (Best) to 3,981 MMBOE from 2,913 MMBOE which is a more than handy 597.3 MMBOE to Eco.

The company has confirmed that the first well in June will be on the Jethro target looking for 214.5 MMBOE and will have a COS of 43.2%, this will be followed by a similarly risked well which the partners are selecting a location for now.  Whilst the company are admirably keeping the adjacent Hammerhead-1 discovery by Exxon low key they do confirm that interpretation has confirmed the presence of oil on their block and that Exxon will drill an offset well on the Stabroek block in the near future.

Whilst Eco shares have performed very well of late I am sure that there is still significant upside potential, after all looking at their net resource number of nearly 600 MMBOE and even at a modest calculation of, say, $5-10 per barrel in the ground the £140m market cap looks strangely out of kilter….

Range Resources

Range has agreed to restructure its balance sheet through various measures including extension of maturity on the $20m convertible to November 2022, with no repayments until maturity; $19.7m of debt due to LandOcean to be repaid through issuance of new shares, with balance of debt extended by 3 years; and the $2.8m deposit for the purchase of RRDSL applied towards the outstanding consideration.

They have also announced a potential new acquisition which would take the company in new direction – a pre-school education business in China. Due diligence is currently underway and should be completed during April 2019 when shareholders should find out full details of the deal.  The acquisition will be deemed a reverse takeover, so the shares will be suspended until documentation is finalised. In the meantime the company will be undertaking a review of the oil and gas business which might just start the process of some probably necessary consolidation of interests in Trinidad.

The company also announced interim results to 31 Dec 2018. Revenue of $7.0m (1H18 $5.4m), with net loss of $(35.9m) (1H18 $(9.6m)) following a net impairment of $30.2m relating to the asset base in Trinidad and Indonesia. Net debt at December of $89.0m. The small dip in production was widely flagged, and the minor fall in output is offset by higher realisations and lower opex costs.

The Beach Marcelle waterflood continues to perform well at 150bopd, with scope to increase this output through an expansion of the programme – planning is underway. The write down of the portfolio in Indonesia and Trinidad should come as no surprise, as projected work plans were being deferred, and the higher oil price making Range subject to the higher taxes under the punitive Trinidadian fiscal regime.

And finally…

It was advertised as Super Saturday in the rugby which it sure was, with Italy at one stage looking like they might beat France and Ireland effectively didn’t turn up against Wales the last match at Twickenham was meaningless, or so we thought…After England had taken a 31-0 lead Scotland replied after the break with 38 points which left England scrabbling around trying to salvage a draw which they did, just.

In the FA Cup Wolves easily beat the Red Devils, the Noisy Neighbours got past the Swans with an offside goal, no justice there, Brighton beat Milwall on pens having been a heartbeat away from losing and the Hornets beat the Eagles.

Finally after all the hype about the pace of the new Ferrari the Australian GP in Melbourne was a 1-2 for Mercedes with the only surprise that it was Bottas leading Lewis over the line.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30722/vsa-capital-market-movers---redt-energy-placing-and-strategic-review-30722.html VSA CAPITAL MARKET MOVERS - redT energy, Placing and Strategic Review https://www.oilcapital.com/columns/vsa-capital-market-movers/30722/vsa-capital-market-movers---redt-energy-placing-and-strategic-review-30722.html Thu, 14 Mar 2019 15:04:00 +0000

redT energy#: Placing & Strategic Review, 14/03/19

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redT energy#: Placing & Strategic Review

redT energy (LON:RED), an energy storage solutions company, has announced a Strategic Review to explore all options available to fund the business. To support this process the company has conditionally raised £940,000 at 2p with an associated Open Offer to raise up to a further £2.26m.

The Placing and Open Offer are conditional on shareholder approval at a General Meeting, which is expected to occur on 3 April 2019, and the fundraise is subject to a minimum of £1.5m being raised in aggregate across the Placing and Open Offer.

Several operational updates have also been announced:

  • CEO Scott McGregor will be stepping down from the Board of Directors but will remain with the business to run operations.
  • Non-Executive Director Neil O’Brien will move to Executive Chairman to lead the Strategic Review process, replacing Jeff Kenna, who will become a Non-Executive Director.
  • Major cost-cutting programme has been implemented with the average monthly cash spend moving below £0.5m a month.
  • A non-binding MoU has been signed for the sale of its US biogas management business for US$1m (expected to close in Q2 2019).
  • A purchase agreement has been signed for 72 tank units (c.5MWh) for a large UK grid project (delivery across 2019 and 2020) with a redesigned German grid project now submitted to potential financers for review. First Gen3 machine awaiting delivery to Anglian Water site. 32 Gen2 tank units delivered to sites in Australia, Thailand, Botswana and the UK since October 2018.
  • Heads of Terms partnership agreement signed with a major European energy company to offer a fully-financed, solar PV plus energy storage product to UK C&I customers, targeting the deployment of 100MW of solar PV and 60MWh of storage over the next three years.
  • Company has adopted a more conservatively weighted sales pipeline, which now totals £145m (from £188m in mid-December).

Research Coverage Suspended

Given the company has now entered a Strategic Review process, we have suspended our research coverage on the stock.


Risers and Fallers (Last Close)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Biffa

538.8

215.5

9.50

+4.6%

Symphony Environmental Technologies

9.3

6.0

0.25

+4.3%

ITM Power

71.9

22.2

0.70

+3.3%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

CAP-XX

17.8

5.5

(0.35)

-6.0%

Dialight

152.3

468.0

(22.00)

-4.5%

Proton Power Systems

51.6

8.0

(0.25)

-3.0%


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30719/vsa-capital-market-movers---m2-cobalt-30719.html VSA CAPITAL MARKET MOVERS - M2 Cobalt https://www.oilcapital.com/columns/vsa-capital-market-movers/30719/vsa-capital-market-movers---m2-cobalt-30719.html Thu, 14 Mar 2019 10:04:00 +0000

VSA Morning Miner, 14/03/19

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M2 Cobalt (CVE:MC

M2 Cobalt (CVE:MChas provided an update on the exploration programme from late 2018, recent corporate activity and the programme for 2019 which includes up to 6,000m of drilling.

Assays have now been received, in full, for the 2,027m diamond drilling programme completed in late 2018. Drilling was focused at Kilembe with seven holes covering 1,056m. These holes intercepted sulphide mineralisation in the form of sphalerite, galena and chalcopyrite albeit with no major intersections, however, the results have provided important data for the next step. Four holes were also drilled at Bombo, the ultramafic target, covering 839m which also intercepted sulphide mineralisation. At the Waraji target, in the Bujagali license area, rig issues and timing around Christmas meant that just 131m were drilled meaning only a limited dataset was received.

The merger with Jervois Mining (JRV AU) is making firm progress and shareholder approval is now indicatively above 50.3%. M2 has also fulfilled its commitments required for the drawdown of a US$3m working capital facility from JRV. A shareholder vote to approve the merger is planned for early-mid May 2019 but the funds may be drawn down immediately.

The funds will be used to further M2’s exploration with an additional 3,000m of drilling at Waraji and Nile and a further 3,000m subject to additional IP geophysics. The results from the IP work will be used to better identify suitable follow up targets. Furthermore, M2 will commence a systematic geophysical and geochemical sampling programme on the license areas acquired in late 2018 as well as over a broader area at Kilembe in line with the Phase 1 work programme previously carried out.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30713/vsa-capital-market-movers---colombus-energy-30713.html VSA CAPITAL MARKET MOVERS - Colombus Energy https://www.oilcapital.com/columns/vsa-capital-market-movers/30713/vsa-capital-market-movers---colombus-energy-30713.html Wed, 13 Mar 2019 09:34:00 +0000

VSA Morning Flow Test, 13/03/19

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Columbus Energy (LON:CERP)

Columbus Energy Resources (CERP LN) has provided an update regarding its Inniss-Trinity Incremental Production Service Contract (IPSC). Following the receipt of approval for conduct of the CO2 Enhanced Oil Recovery pilot project from Heritage Petroleum Company, Predator Oil and Gas (PRD LN) will commence first injections in Q2 2019, subject to the receipt of the remaining regulatory approvals.  

Inniss Trinity has been identified as being a suitable reservoir for CO2 injection and Trinidad’s ammonia production plants mean a potential easily available source of CO2. Due to the differing oil API’s and structural nature of the reservoirs across Trinidad CO2 injection has only been considered at certain reservoirs. The pilot project will, however, provide important data as to the viability of this alternative process and positive results could potentially unlock significant value at Inniss Trinity as well as other similar reservoirs in Trinidad.  

CERP has an interest in Inniss Trinity through its fully owned subsidiary FRAM Exploration (Trinidad) Limited. Through the agreement and as previously announced if the project is successful, Predator has the option to purchase FRAM for US$4.2m and is funding the pilot project.

We reiterate our Buy recommendation and 21.4p target price.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30703/vsa-capital-market-movers---egdon-resources-30703.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30703/vsa-capital-market-movers---egdon-resources-30703.html Mon, 11 Mar 2019 09:20:00 +0000

VSA Morning Flow Test, 11/03/19

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Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced positive results from the Springs Road 1 well where it has a 14.5% interest. The drilling has demonstrated over 250m of hydrocarbon bearing shales including the Upper and Lower Bowland shales as well as the Millstone Grit sequence. Significant gas indications within these shale sections have also been noted. This means that each of the key drilling targets were successfully intercepted although drilling is ongoing indicating the potential for further targets to be intercepted within the deeper sequences. Petrophysical analysis and core analysis is now being carried out which is due to be completed in Q2 2019.

EDR holds 82,000 net acres in the Gainsborough Trough and these initial results confirm the viability of the company’s strategy, in our view. The results indicate the potential for significant prospective resources at Springs Road and potentially in the wider EDR license area. These licenses are focused on the central areas of the Gainsborough Trough therefore differing from IGas’ (IGAS LN) strategy which includes Tinker Lane on the margins of the play.

Our valuation attributes 13.5p/sh. to EDR’s shale acreage highlighting the undervalued nature of the shares currently, however, we see this announcement as a significant step towards derisking the shale assets.

We reiterate our Buy recommendation and 46.7p target price.

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30680/vsa-capital-market-movers---egdon-resources-30680.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30680/vsa-capital-market-movers---egdon-resources-30680.html Mon, 04 Mar 2019 09:30:00 +0000

VSA Morning Flow Test, 04/03/19

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Egdon Resources (LON:EDRN)

Egdon Resources (EDR LN) has provided an update on operations for H1 FY 2019 ending January 2019 and the interim results are scheduled to be announced on 9 April 2019. The update indicates that EDR is on track to meet its operational guidance which indicate a significant uptick in production in FY 2019 and a consequent benefit to the earnings outlook.

Production from the Ceres gas field, Keddington and Fiskerton Airfield was 30,026boe, with an average of 164boepd, up 67% YoY and in line with guidance. Total production during January 2019 amounted to 238 boepd again in line with expectations for a further increase in output in H2 FY 2019 and we maintain our full year production forecast average of 210boepd.

EDR reports strong progress at its unconventional assets in particular at Springs Road where EDR has a 14.5% carried interest alongside operator Igas (IGAS LN).  Drilling operations at Springs Road in the Gainsborough Trough shale play are progressing faster than expected and IGAS has indicated that the well has encountered shales including the Bowland Shale, at c.2,200 m as well as the Millstone Grit sequence where read through from Tinker Lane indicates preliminary gas concentrations. Results are due to follow.

As reported in February 2019, preliminary analysis of the Biscathorpe indicated the Basal Westphalian Sandstone target was poorly developed in the drilling location and the expected thickening of the reservoir did not occur as expected. However, because potential remains elsewhere, the prospect will now be considered for further appraisal when the new well data is incorporated into a subsurface model. 

EDR are currently in third-party discussions relating to the introduction of an industry partner to fund the planned 3D seismic and appraisal drilling on the Resolution gas discovery. We currently await the results from an independent competent persons report (CPR).

With a significantly strengthened earnings outlook on the back of higher production the outlook for EDR remains positive, in our view. Furthermore, with Springs Road results upcoming we see additional near term catalysts based on a rerating of the company’s share acreage valuation.

We reiterate our Buy recommendation and target price of 46.7p.

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30676/vsa-capital-market-movers---nulegacy-gold-30676.html VSA CAPITAL MARKET MOVERS - NuLegacy Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30676/vsa-capital-market-movers---nulegacy-gold-30676.html Fri, 01 Mar 2019 10:12:00 +0000

NuLegacy Gold#: Go West!

For the full report, please click here. 

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Aggressive Step Out Success

While in 2018 NuLegacy Gold (CVE:NUG) demonstrated a large body of continuous mineralisation in the Iceberg / Serena zones, NUG has now shifted its focus towards identifying the high grade core of what is now clearly an extensive CTGD system of gold mineralisation. NUG’s most recent drilling stepped out 1,200m (3,900ft) west of the Serena zone towards the Northern Nevada Rift intercepting amongst other intercepts modest gold mineralisation of 3.1m at 0.39g/t. This intercept although not high grade confirmed that mineralisation extends down dip to the West within the same structures and Wenban 5 host rock.  

8,700m Drill Programme; West is Best

NUG following a systematic relogging of existing core and the results from late 2018 has made major steps forward in its exploration targeting process. In 2019 through a 20 hole 8,700m (28,500ft) programme NUG will test prospects to the west of its prior drilling testing the deeper Eocene CTGD host rocks which as demonstrated by recent CSAMT results lie beneath Miocene basalt cover. NUG will continue to target the angled fault structures identified in 2018 as key to hosting high grade mineralisation and with the 2018 success from the westerly SR18-02C (22.1m at 6.59g/t Au) it is thought the mineralisation system strengthens down dip to the West, an area which has largely been previously ignored due to the basalt cover.

Nevada Remains Core to Enlarged Barrick Gold

Despite an uptick in sentiment towards gold stocks on the back of dovish Fed activity and a rally in the gold price up to a ten month high of US$1,341/oz and now up 2% YTD. However, the landmark merger between Barrick Gold (ABX US) and Randgold Resources has resulted in underperformance for NUG and its regional peer group as investors await the results of a strategic overview. We believe that the recent bid by ABX for Newmont Mining (NEM US) demonstrates Nevada’s importance to the majors’ growth strategies, however, it is by no means a done deal.  

Recommendation and Target Price

In 2019 we expect NUG to build on the major breakthroughs in its understanding of the Red Hill geology with a work programme focused on identifying the high-grade core of the substantial discovered system of mineralisation discovered to date.

We reiterate our Speculative Buy recommendation.



 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30674/vsa-capital-market-movers---lake-resources-30674.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30674/vsa-capital-market-movers---lake-resources-30674.html Fri, 01 Mar 2019 09:42:00 +0000

VSA Morning Miner, 01/03/19

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Lake Resources (ASX:LKE)

Lake Resources (LKE AU) announced yesterday the finalisation of a funding package of up to A$5m with an initial tranche of A$1.65m structured as a convertible note with a conversion price equivalent to 90% of the 20-day VWAP. Interest is charged at 15% per annum compounded quarterly and paid in cash in advance.

The funds will be used to advance the Kachi PFS as well as additional drilling at Cauchari. In 2018 LKE announced a maiden resource of 4.4mnt LCE at 211mg/l Li, one of the largest projects globally and have been advancing innovative techniques with partner Lilac Solutions as to how to extract lithium more efficiently. The PFS at Kachi will consider traditional evaporation extraction techniques alongside Lilac Solutions’ ion exchange extraction techniques, the potential benefits of which have been highlighted by recent unseasonably heavy rainfall in the Andes. This is likely to provide support for lithium prices in 2019 as dilution in the evaporation ponds of incumbent producers reduces lithium output in the near term. Successful implementation of the Lilac Solutions technique would sidestep this issue while also limiting the groundwater impact.

With Albemarle (ALB US) recently reporting higher prices in Q4 2018 along with weather related production disruption we believe that the strong fundamentals we have previously argued are now being more clearly reflected. Delays to supply ramp ups caused by project financing hiccoughs on the back of weak market sentiment only serve to strengthen those fundamentals and we believe this backdrop provides a strong setting for a broad-based rerating of the sector in 2019.

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

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30654/oil-price-president-rockrose-reaboldunited-iog-and-finally-30654.html Oil price, President, RockRose, Reabold/United, IOG And finally… https://www.oilcapital.com/columns/the-pay-zone/30654/oil-price-president-rockrose-reaboldunited-iog-and-finally-30654.html Mon, 25 Feb 2019 15:12:00 +0000 WTI $57.26 +30c, Brent $67.12 +5c, Diff -$9.86 -25c, NG $2.72 +2c

Oil price
Last week WTI was up $1.28 and Brent 87c, the differential is still around ten bucks but the market remains fairly positive. Last night it seemed that President Trump held out a modest olive branch and delayed the rise in tariffs at least until after meeting with the Chinese President.

Elsewhere the news is mainly geo-politics led, in Venezuela after the major disruptions over the aid convoys some commentators are claiming the end is nigh for President Maduro, I will believe that when I see it. In Nigeria, where terrorists have threatened to sabotage oil installations should President Buhari win the vote there is further tension as there is in Libya.

The Baker Hughes rig count showed a fall of four units overall to 1047 and by four in oil as well to 853.

President Energy (LON:PPC)
President has announced that it is to raise up to £6.5m at 8p to accelerate the expansion of its programme of work in the Rio Negro Province in Argentina. Primarily intended to fast-track development of its gas assets which account for 19% of reserves but only some 3% of production and with the encouragement of both shareholders and non-shareholders the company has gone ahead with the raise.

After a formidable year in which turnover was up 160% to $47.2m, operating profit was $14.3m, and operating free cash generation of $21.5m, 2018 more than delivered the goods. Year-end production was 3,300 b/d and the guidance for this year is 4,500 (not including gas) and President is targeting a 50% in each of the next three years which is funded from internal cash flow. In order to accelerate growth in the gas assets the company has decided to raise this money in order to bring forward ‘ a number of important developments and ‘believes that the Company’s gas assets have the potential to generate 30% of the enlarged Group production by end 2020’.

Whilst at first the idea of raising more money when the state of the finances is so strong, and with such a powerful programme of investment already announced, this move is one of substantial confidence in the Rio Negro assets purchased last year. With all the free cash flow already allocated and equity holders (and potential buyers) queuing up to back the team at PPC this deal really hits the spot.

The raise is at a very modest discount and with Peter Levine converting debt into equity, reduces debt and cuts interest costs for the company whilst expanding the shareholder base and importantly, improves liquidity. This is indeed ‘turbocharging’ spending and there will be much more to work on for the company, results, based on recent examples should be impressive and the shares should be much higher.

RockRose Energy (LON:RRE)
RockRose has this morning announced that it is buying the North Sea and West of Shetland assets of Marathon for $140m, it would not have been long ago that being able to pay this sum ‘from existing resources’ would have been unthinkable and shows just how far RRE has come.

The deal brings operated interests in the Greater Brae area and in the BP operated Foinaven area as well as interests in the SAGE, Brae-Forties and WASPS infrastructure providing tariff income. It adds 35m boe  of 2P reserves making RRE up to 70m boe and production of 13/- boe/d which together now makes 24/- boe/d.

It speaks volumes that this is the first time in the acquisition-based company’s history that Chairman Andrew Austin has been prepared to take on the operators role and clearly this speaks volumes for his future plans. Marathon has made a $350m contribution to decommissioning costs but some of that is still some way down the line. With sizeable cash flows the bulking up of RRE can now seriously begin and this looks like a good enough starter pack for such a process.

The bad news for shareholders is that with this being a reverse takeover under the UK listing rules the shares have to be suspended until completion, prospectus or the deal not going ahead, in my view around three months. The good news is that the shares should emerge a fair bit higher on the back of this news, rewarding investors for patience.

Reabold Resources (LON:RBD)/United Oil & Gas (LON:UOG)
Reabold and United Oil & Gas have announced that the Colter well, 98/11a-6 ‘unexpectedly remained on the south side of the Colter bounding fault’ but nevertheless encountered oil & gas shows over a 9.4m interval of Sherwood Sandstone reservoir which is estimated as holding around 15 mmbbls of oil.

As a result of this it will be necessary to drill a side track and this time to go to the north of the Colter bounding fault. RBD has agreed to fund Corallian to the tune of £750/- priced at a 30% discount to their next equity raise which proves that it has been incredibly foresighted of the RBD board to have kept a little capital up their sleeves, so to speak.

The side-track should take around two weeks and should be seen as a bit of a bonus as drilling the appraisal would have been another project and whilst probably from onshore means that it has saved time and money overall. Having said that, having missed the target with the first well there are few prizes to be given out if they do it again.

Independent Oil & Gas (LON:IOG)
IOG has belatedly but probably wisely worked out that it needs to farm-out the Southern North Sea project that they have been working on for so long. By now we should have been waiting for news of the Harvey appraisal well which is now scheduled for ‘mid 2019’ and of course the long-awaited equity funding of the  ‘core project’.

Plan B suggests that the farm-out process  is under way and that the company have been ‘encouraged by the level of serious interest shown to date’ and of course any success on this front ‘could provide valuable funding optionality via a development carry which would significantly reduce the new capital required for its Core Project’. The company say that they plan to select a preferred partner in 1H 2019 which will then give them the opportunity to choose between an industrial or a capital markets solution for the funding of the project.

IOG has at long last bitten the bullet with regard to the financing and delivery of its core project. I have little doubt that it can move ahead profitably and swiftly but it should never have taken this long, it looks like a helpful dose of reality has recently been injected. 1H may still be slightly on the optimistic side but if there are genuine potential investors out there it now has the best chance it has ever had to get off the ground.

And finally…
In brief as I’m running very late.. The Noisy Neighbours eventually saw off Chelski but had to do it in a penalty shoot out and not until the Chelski keeper had refused to be substituted, can’t see that happening to, say, Sir Alex Ferguson or any Liverpool boss.. The Red Devils and Liverpool drew 0-0 which put them one point at the top of the table, game on…Spurs lost to Burnley and the Gooners beat the Saints.

Wales did beat England in the rugby who lacked any brain power in the second half and kicked away possession way too much, livens up the rest of the tournament though…France beat Scotland and Ireland did beat Italy but not so easily…

Kempton Park on Saturday was great fun and with Paul Nicholls saddling the winner of the bumper for city chief Jon Gregory despite the horse nearly taking the wrong course all ended up well.

Finally I would like to wish a speedy recovery to John Walmsley, Chairman of Pantheon but with a long and very creditable career in the oi

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30645/vsa-morning-miner---tectonic-gold-30645.html VSA Morning Miner - Tectonic Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30645/vsa-morning-miner---tectonic-gold-30645.html Fri, 22 Feb 2019 09:42:00 +0000 Tectonic Gold (LON:TTAU)

 

Tectonic Gold (LON:TTAU) has provided an update its Mt Cassidy project close to Specimen Hill in Queensland, Australia. 15 historic holes had been drilled at shallow depth intercepting gold mineralisation while geochemical analysis was supportive of the theory that the area was host to IRGS style mineralisation. Historic mining had encountered gold bearing veins of up to 15g/t Au.

Over the past year TTAU has been conducting additional exploration at Mt Cassidy which comes under its Federal Government supported R&D programme. This work has been conducted in collaboration with the Centre of Ore Deposit Excellence Studies (CODES). The findings of systematic geological mapping and rock chip sampling demonstrate the likely presence of both VHMS style zinc, gold, silver mineralisation as well as epizonal to epithermal IRGS gold, silver mineralisation.

Rock chip samples yielded grades of up to 30g/t gold, however, the research has demonstrated that the local geological history is somewhat complex with significant deformation of the IRGS system overlain by a large shear system. TTAU is now planning to use the same deep penetrating advanced geophysics techniques, successful used at Specimen Hill, to aid in targeting a drill programme. Following the recently announced transaction we highlight that Queensland remains a core focus of TTAU.

We reiterate our Speculative Buy recommendation. 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30639/vsa-daily-flow-test---egdon-resources-30639.html VSA Daily Flow Test - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30639/vsa-daily-flow-test---egdon-resources-30639.html Thu, 21 Feb 2019 09:17:00 +0000

VSA Morning Flow Test, 21/02/19

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Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced the completion of drilling at Biscathorpe to a depth of 2,133m reaching the Dinantian limestone. The Biscathorpe 2 (B2) well was intended to test the theory that the reservoir thickened down dip from Biscathorpe 1 (B1), however, this has not proven to be the case. Drilled to the north west of B1 it is now thought that the thickening may occur to the north and north east of B1.

Although a number of porous sandstone reservoir intervals were encountered in the shallower Westphalian sequences where B1 intercepted the reservoir at B2 these are thought to be water wet. The Dinantian carbonate below the Westphalian sandstone did yield 99m of oil shows demonstrating proximity to an effective petroleum reservoir.

Consequently, EDR will now need to remodel the subsurface model and to reflect a more conservative outlook we have adjusted our model from the mean estimate of 14mmboe resources to the P50 estimate of 7.3mmboe. This results in a 3.2p reduction in our target price and an updated Biscathorpe valuation of 3.5p versus 6.7p previously.

Although this result is a disappointment for EDR the market has previously factored in little of the upside potential for Biscathorpe and we see the correction as an overreaction. Furthermore, there remain a number of potential catalysts including Springs Road, where rapid progress is being made, Resolution and also the significantly improved near term earnings profile arising from the Ceres well which was brought back online in late 2018. This, as we have previously stated, suggests that EDR is likely to be profitable in the current financial year and we view the overcorrection as a buying opportunity with the stock now at the bottom of its recent trading range despite an outlook that remains positive.

We reiterate our Buy recommendation although reduce our target price by 6% to 46.7p.

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30626/oil-price-sound-eco-atlantic-plexus-pantheon-aaog-aaa-and-finally-30626.html Oil price, Sound, Eco Atlantic, Plexus, Pantheon, AAOG, AAA And finally… https://www.oilcapital.com/columns/the-pay-zone/30626/oil-price-sound-eco-atlantic-plexus-pantheon-aaog-aaa-and-finally-30626.html Mon, 18 Feb 2019 15:32:00 +0000 Oil price, Sound, Eco Atlantic, Plexus, Pantheon, AAOG, AAA And finally…

 

 

WTI $55.59 +$1.18, Brent $66.25 +$1.68, Diff -$10.66 +50c, NG $2.62 +5c

Oil price

There are plenty of people in the oil market who have been caught out by this rally but if you look at the Opec+ numbers and bear in mind that Russia will come late to the production cuts party then it was only the lag that should have caught people out here. This is why investment banks changing their forecasts usually ring the bell, just when analysts have lost their patience they move the goalposts and hey presto the price goes the other way. The best traders are there for a good reason……………….

Right now they are seeing significant oil coming off the market, mainly from Saudi Arabia but also from other Gulf states and of course those who are unable for any reason (sanctions mainly) to sell their oil. Ironically this has also meant that different grades of crude are swinging around, the WTI/Brent differential is over $10 and whilst Brent rose a full $4.15 last week WTI was only up $2.87. As for Venezuelan, Iranian and some other Middle East grades of crudes markers, and prices and markets are wildly different as markets dictate.

Sound Energy

Sound has announced this morning that the TE-10 discovery has been confirmed and that independent consultants ERCE has undertaken a petrophysical analysis upon which the company has acted. Accordingly the company has made an upward revision of net pay estimates of 47% at the top end of a 9.5m to 13.1m (mid) to 15.4m range.
Following the latest seismic mapping, modelling and net pay analysis the company has estimated the gas reserves found at TE-10 to be across both structural and stratigraphic trapping geometries. All this gives mid case potential on a gross basis of 1430 bcf GOIP with a 3408 bcf GOIP high case and a 584 bcf GOIP low case. It seems the bold exploration strategy is paying off. Clearly as is always the case with large discoveries, there will be the need for further appraisal drilling.
Accordingly a well test at TE-10 is expected to commence ‘within four weeks’ when specialist equipment has been brought to site and at which unstimulated and stimulated production flow tests are expected to take ‘at least 30 days’. With the material upgrading of the net pay in the well, the prize of a multi tcf potential gets closer and with it the dream of unlocking the Tendrara Basin becomes nearer to reality.

Eco Atlantic Oil & Gas

Last week I met up with Gil Holzman, President and CEO and Colin Kinley, COO of Eco Atlantic Oil & Gas. There remains much excitement at the company and as it was only the day after the Tullow update at which, if possible, even more palpable board level enthusiasm and eagerness was displayed.

With Tullow confirming two, likely three wells in its spring and summer drilling campaign at Orinduik, which I think should start at the end of May or beginning of June, investors can expect action on rig selection and firmed up dates before too long. With Exxon having made two more substantial discoveries only a few miles away, Eco are incredibly well placed with their 15% of Orinduik to gain and at 63p I consider the shares still outstandingly cheap on pretty much any metric.

Plexus Holdings

A profit warning from Plexus this morning who have announced that whilst revenues are in line, lower gross margins and higher overheads mean that EBITDA and LBT will be below market expectations for the year to June 2019. Having said that the statement and comments don’t appear to have got any shorter so brevity and profitability are out of sync.

Pantheon Resources

Pantheon has announced that the Winx-1 well  spudded in Alaska on the 15th of February. This will be a 50 day well and comes as a part of the merger of Pantheon with Great Bear in which Pantheon shareholders were severely diluted in the process. Having said that it means that shareholders will be able to participate in a number of most exciting wells being drilled world wide at the moment. As part of the deal the Great Bear management team were parachuted into Pantheon and hope to be able to rescue the wells in Texas which have been so disappointing operationally.

Anglo African Oil & Gas

Sort of good news bad news from AAOG this morning as they revealed that partners SNPC, the Congolese state oil company had paid back $663/- of the $10m that they owe them. Obviously good news in that it is  a payment and that the SNPC have said that they will pay back the rest but there is a twist, AAOG had wanted a substantial increase in its 44% holding in the licence instead. I’m sure that the repayments would still be being made had the well been a duster…Its a bit like your mother-in-law driving off a cliff in your new Ferrari I suppose.

Anglo African Agriculture

Spookily, another Anglo African company this morning and not one that I have written about before as, as its name suggests it has historically been primarily engaged in agriculture but it is beginning to change its spots somewhat. The movement into oil is via a tie-up with Comarco Ports in Mombasa, a company that has signed up a long term deal with a multinational trading and transport group  to establish an LPG import and distribution facility. Should this become established in the African oil space it may be worth keeping just one eye on.

And finally…

The FA Cup had no surprises this weekend although Newport County fared better than some lately, being done only 1-4 by the Noisy Neighbours. The fare was pretty thin, Bristol City lost to Wolves although did come back well in the second half whilst Donny lost to the Eagles and there were wins for the Swans, the Seagulls and Milwall who all go into the draw tonight with either Chelski or the Red Devils who play later at Stamford Bridge.

There was so much racing I couldnt do it justice but it was a good Saturday for Paul Nicholls and in particular good to see City legend Jon Gregory and wife Debbie leading in Grand Sancy at Wincanton, next stop the Supreme at Chelters.

As we get slightly warmer it can be seen that F1 testing has started ahead of the new season with new cars and some team changes.

And Tyson Fury has signed with ESPN in the US for £80m …….

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30622/vsa-capital-market-movers---tectonic-gold-30622.html VSA CAPITAL MARKET MOVERS - Tectonic Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30622/vsa-capital-market-movers---tectonic-gold-30622.html Mon, 18 Feb 2019 09:05:00 +0000

VSA Morning Miner, 18/02/19

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Tectonic Gold (LON:TTAU)

Tectonic Gold (TTAU LN) has announced an agreement with VAST Mineral Sands to acquire an interest in diamond mining concessions in South Africa. TTAU will gain a 50% economic interest for US$650k paid in TTAU shares at a price of 2.2p/sh a significant premium to the current share price of 0.5p and a 10% premium to the listing price in June 2018. TTAU has indicated that it is likely to require additional working capital to fully fund the venture and the enlarged group although the diamond concession is targeting immediate cashflows. TTAU intends to use cashflows to fund ongoing exploration at its core Australian gold exploration projects.

VAST, a private South African company, has interest in minerals sands and diamond concessions. The Alexkor concession into which TTAU is acquiring an interest overlies an 80km stretch of beach in north western South Africa. The Alexkor mine is owned by the SA Government and VAST has a ten-year concession to mine the beach areas as well as process the tailings and slimes from the Alexkor mine which has operated since 1928. This is a free dig operation with no drilling or blasting required. With regard to the tailings VAST has an agreement to dig and process the tailings with revenues after treatment costs and royalties split 80/20 between VAT and Alexkor.

VAST intends to commence alluvial mining of the beach area close to the Orange River, a well-known area for alluvial diamond extraction. De Beers borders the concession to the south at its Kleinzee operations. VAST anticipates contained diamond resources in the concession of around 500kct with an indicative average value of US$450/ct. Production is targeted at an initial 900ct per month.

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30619/oil-price-president-coro-igas-genel-and-finally-30619.html Oil price, President, Coro, IGas, Genel, And finally… https://www.oilcapital.com/columns/the-pay-zone/30619/oil-price-president-coro-igas-genel-and-finally-30619.html Fri, 15 Feb 2019 12:02:00 +0000 Oil price, President, Coro, IGas, Genel, And finally…

 

 

WTI $54.41 +51c, Brent $64.57 +96c, Diff -$10.16 +45c, NG $2.57 -1c

Oil price

Oil looks like it is going to show a good gain on the week, particularly Brent which is tapping on $65 as I write. Some months ago I wrote that ahead of the Nigerian elections that there would likely be terrorist activity, to be honest I wasn’t expecting it to happen only days before the contest but right now threats to oil installations in-country are being taken seriously. Combine that with Opec+cutbacks, led by Saudi but also even Russia are stepping up to the plate, and of course robust Chinese demand and crude is back in favour. The demand for Brent and its similar blends has taken the differential to over 10 bucks which is probably enough for the time being unless Nigeria melts down.

President Energy

An independent reserves report shows that in the Neuquén Basin reserves rose substantially last year, 1P was up 82% to 8.1 MMboe and 2P was up by 41% to 11.4 MMboe fully justifying management investing in the area. Overall Argentina was up 6% to 15.4 MMboe whilst overall 2P fell as the company concentrated its capex on the Rio Negro fields rather than the lower valued Salta Province.

These numbers justify the activity in Neuquén and the recent acquisitions and we can expect increases at the Las Bases and Puesto Prado acquisitions as well as significant increases in gas production. Overall this puts NPV 10 numbers up substantially and management estimates the Group’s net 2P reserves value on an NPV 10 basis of nearly $300m. (including Louisiana but ignoring any exploration resources)  ‘This represents an approximate 200% premium to the Company’s total enterprise value taking into account its current market capitalisation and total gross debt of approximately US$30 million’.

The work that was put in last year is being franked by independent reports that prove the strategy at President to be working well. If this years’ extensive activity with the drill bit is anything like as good as last years then the President rerating still has a long way to go.

Coro Energy

A brief regulatory update from Coro this morning with regard to their Italian assets, whilst their may be some very modest fee increases amounting to ‘increase group annual operating costs by €0.1m’ there are no other material changes to the portfolio. With recent deals all in Asia, Coro has a very exciting future as detailed in an interview I did with CEO James Menzies yesterday, the link is below.

Core Finance CEO interview: James Menzies of Coro Energy

IGas Energy- Gas leak…

IGas has announced this morning that following a leak to super soar-away Sun, preliminary tests at Tinker Lane are ‘encouraging’ for the potential of gas resources in the Gainsborough Trough Basin but that these are still subject to further testing and validation. At Springs Road drilling is progressing more quickly than expected and the company has encountered shales at @2,200m including finding the Bowland Shale Horizon which is further good news.

After a long wait it seems that the onshore companies are having some genuinely good results that could end up in meaningful, safe and relatively simple gas production onshore UK. It now only leaves the Government to realise that heating and powering UK towns and cities from the inexpensive gas under our own soil is not only financially attractive to all but saves buying from Russia, Norway, Qatar or even the USA, the words No and Brainer come to mind…

Genel Energy

Earlier this week I sat down with Bill Higgs, COO of Genel Energy and caught up with what has been a very busy few months. With continuing good news from Peshkabir, more wells in Taq Taq and the acquisition of the Chevron assets much has been happening at Genel and with developments like Bina Bawi still to come the outlook for Genel is very exciting, here is the link.

Core Finance CEO interview: Bill Higgs of Genel Energy

Link

Back on Monday I did the Podcast, seems like a long time ago now, I covered a number of stocks that were busy whilst I was away.

VOX Markets podcast: Coro Energy, Solo Oil & Gas, Aminex, Genel Energy, SDX Energy, Savannah Petroleum, Amerisur Resources, President Energy and Anglo-African Oil & Gas

And finally…

The FA Cup is back and the big fixture pulled from the hat was Chelski v The Red Devils who play on Monday night, what a bore…Elsewhere there are exciting fixtures although Newport will hope to do better against the Noisy Neighbours than Chelski did last week… Wimbledon take on Milwall, that will be a crowd puller, Doncaster host the Eagles and even Andy is heading west for Bristol City v Wolves.

With racing off last week and a lot of horses needing a run before Cheltenham there is good racing over the weekend, particularly at Ascot and Haydock Park.

Now I have had terrible stick for not mentioning the rugby on Monday morning, it was a bad day for logistics that’s all I can say… With Ireland getting back to form to beat Scotland and Wales seeing off Italy on the Saturday it left England to demolish France at Twickenham. Sets up Wales v England pretty well wouldnt you say?

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30605/vsa-morning-miner---bacanora-lithium-30605.html VSA Morning Miner - Bacanora Lithium https://www.oilcapital.com/columns/vsa-capital-market-movers/30605/vsa-morning-miner---bacanora-lithium-30605.html Wed, 13 Feb 2019 09:26:00 +0000

VSA Morning Miner, 13/02/19

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Bacanora Lithium (LON:BCN)

Bacanora Lithium (BCN LN) has announced interim results for H1 2018 ending December 2018. An operating loss of US$4.4m versus US$3.3m in the prior year was largely due to higher SG&A as headcount on site increased given the advanced nature of the project. As previously announced BCN received significant commitments for funding in the period with RK Mine Finance committing US$150m in debt and conditional equity commitments of US$65m and US$25m respectively from the State General Reserve Fund of Oman (SGRF) and BCN’s offtake partner Hanwa. With the first drawdown from the RK facility undertaken BCN now has a cash position of US$20.5m and borrowings of US$19.3m.

This facility has enabled BCN to make further progress in advancing the development of the Sonora project with ongoing work on the EPC and detailed design of the kiln and crystallisers; key stages in the flowsheet. In addition, acquisition of land makes site access easier at construction while further progress with environmental permissions was also made during the period.

The final funding package continues to be the main outstanding hurdle for BCN, however, we believe that the project is fundamentally viable with robust economics and a proven flowsheet as demonstrated by the successfully operating pilot plant. This has been validated by the funding and offtake partners committed to date and we highlight how rare it is to gain such a broad range of expert backers in a junior resources company.

At Zinnwald, BCN remains on track for a feasibility study in Q2 2019 having achieved a 30% increase in an NI 43-101 compliant resource to 125kt contained lithium. BCN also confirmed battery grade lithium fluoride of 99% can be produced from the resource.

Although the weakness in the lithium equity space has persisted into 2019 the fundamentals continue to be strong with EV sales continuing to strengthen and the pipeline of lithium ion battery manufacturing plants continuing to grow. Strategic investors remain active in the space with Albemarle’s (ALB US) US$1.15bn acquisition of the Wodgina spodumene project in WA and Tianqi’s acquisition of a minority interest in SQM (SQM US). Reports of recent heavy rainfall in the Andes, however, may cause near term disruption to brine producers causing near term pricing increases and support for lithium equities.

We reiterate our Buy recommendation and 115p target price.

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30597/oil-price-coro-solo-genel-range-tower-and-finally-30597.html Oil price, Coro, Solo, Genel, Range, Tower And finally… https://www.oilcapital.com/columns/the-pay-zone/30597/oil-price-coro-solo-genel-range-tower-and-finally-30597.html Mon, 11 Feb 2019 16:13:00 +0000 Oil price, Coro, Solo, Genel, Range, Tower And finally…

 

 

WTI $52.72 +8c, Brent $62.10 +47c, Diff -$9.38 +39c, NG $2.58 +3c

Oil price

Rather drab at the moment oil, the year of the pig celebrations shut the far east down for most of last week and week on week WTI was down $2.54 and Brent off 65 cents, mainly due to US stocks being higher than expected and a stronger greenback.

Coro Energy

Coro has announced the acquisition of a 15% direct interest in the Duyung PSC, West Natuna Basin offshore Indonesia which contains the shallow water Mako gas field and has low risk step-out exploration upside. The company is paying $4.8m in cash and shares and will pay $10.5m towards the 2019 drilling programme, as part of this process the company is doing a €22.5m bond issue.

Coro has managed to get into a high quality asset in a great post code with ‘ultra low risk dynamics and high value step out potential. I am acquainted with the field as Tom Kelly of Empyrean Energy has been telling me about the asset for some time. In addition the deal gives them near term production and the likelihood of medium and longer term uplift.

This deal is a great move for Coro, it gives them exposure to a top class asset which is adjacent to established infrastructure with access to the buoyant Singapore gas market. Now that the second deal has been done by Coro I can visualise  more to complement it and with James Menzies’ huge experience in the area investors can look forward to an exciting and rewarding future.

Solo Oil

Management over at Solo Oil has given the market more information regarding the management restructuring and ‘key strategy drivers’ identified at the company. Alastair Ferguson moves to Executive Chairman and MD Dan Maling steps down from the board with immediate effect. The company announce the secondment of Doug Rycroft and John Daniel from Gneiss Energy as Operational Manager and Technical Advisor respectively which is a very good move as there are very experienced industry operators.

This comes after the company has completed a full review of all the company’s activities as it takes a strong hand on costs and the monetisation of the asset base. Now the company is turning to building a ‘distinctive portfolio’ involving ‘disciplined investments delivered by smart, capital efficient transactions’. With numerous opportunities on the horizon to look at, the outlook for Solo shareholders is indeed most exciting at this juncture.

Genel Energy

Genel has announced a Tawke PSC reserves update as at the 2018 year end. 1P reserves were 348 MMbbls, unchanged on 2017 after adjusting for production of 41 MMbbls and an upward technical revision of the same amount. The licences have 2P reserves of 502 MMbbls and 3P of 697 MMbbls which are both down but the key 1P number is highly encouraging.

Range Resources

Range has announced that CFO Nick Beattie has resigned ‘to pursue other career opportunities, Group Financial Controller Theo Eleftheriades will take over as acting CFO until a new appointment is made. The move is I understand amicable and he is staying on to complete the current set of results and will have no effect on the ongoing discussions regarding the debt.

Tower Resources

Just a quick word on Tower Resources after much discussion last week about the ‘significant gas condensate’ Brulpadda discovery made last week by Total offshore South Africa. The discover potentially opens up a new world class gas and oil play according to Tower Resources who are in the adjacent Algoa-Gamtoos licence. Along with partners New Age they were planning to farm-down a stake in the block, a job that suddenly got a bit easier. With Total wanting to drill a number of wells in the area the prospects for Tower may be worth taking a look at again.

And finally…

The cricket was a mixed bag at best but England’s Mark Wood showed all that potential we all know he has by taking 5-41 as the Windies had an England-like collapse.

The footy was roughly as expected, Liverpool won 3-0 against the Cherries but the Noisy Neighbours wanted to take back first place and put 6 on Chelsea in a six goal thriller. Spurs beat the Foxes 3-1, the Red Devils won 0-3 at Craven Cottage and the Gooners won 1-2 at the Terriers.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30594/vsa-morning-miner---tectonic-gold-30594.html VSA Morning Miner - Tectonic Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30594/vsa-morning-miner---tectonic-gold-30594.html Mon, 11 Feb 2019 09:13:00 +0000

VSA Morning Miner, 11/02/19

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Tectonic Gold (LON:TTAU)

Tectonic Gold (TTAU LN) has announced results from its Stage 1, 1,500m drill programme at Specimen Hill. The primary aim of this drilling was to confirm the viability of exploration methodology including the use of modern geophysics techniques such as Sub Audio Magnetics and DIAS – 3D IP technology. The results which have intercepted gold mineralisation in the known shallow epithermal vein style mineralisation have confirmed this along with porphyry style mineralisation intercepted at depth. TTAU previously announced that porphyry style mineralisation was intercepted from 230m.

Highlights from the programme include:

  • 0.8m at 1.23g/t Au, 151g/t Ag and 153g/t Te from 14m,
  • 0.9m at 2.15g/t Ag, 0.31g/t Ag and 9.79g/t Te from 6.3m,
  • 1m at 8.25g/t Au, 1.37g/t Ag and 19.95g/t Te from 80.2m
  • 1.6m at 5.79g/t Au, 20.76g/t Ag and 3.27g/t Te from 90.4m including 0.25m at 35.2g/t Au, 37.2g/t Ag and 15.15g/t Te from 90.4m.

 
These shallow epithermal results are not the primary target for TTAU which is targeting large scale porphyry targets at depth. Indeed, the most encouraging aspect from these results is the presence of porphyry indicator elements within the assays including high grades of molybdenum, tellurium, silver and copper. With the follow up stage 2 programme of 7,500m being planned we expect TTAU to begin to explore the larger scale targets at depth now that the initial drilling has confirmed the viability of the exploration techniques.

We reiterate our Speculative Buy recommendation.

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30589/daily-blog-oil-price-aminex-zenith-energy-sdx-energy-genel-unitedprospex-30589.html Daily Blog: Oil price, Aminex, Zenith Energy, SDX Energy, Genel, United/Prospex... https://www.oilcapital.com/columns/the-pay-zone/30589/daily-blog-oil-price-aminex-zenith-energy-sdx-energy-genel-unitedprospex-30589.html Fri, 08 Feb 2019 10:11:00 +0000 Oil price, Aminex, Zenith Energy, SDX Energy, Genel, United/Prospex,

 

 

WTI $52.64 -$1.37, Brent $61.63 -$1.06, Diff -$8.99 +31c, NG $2.55 -11c

Oil price

Oil  fell yesterday, some concern emerged after it seems that the meeting between the US and Chinese Presidents is now scheduled for after the March 1 deadline, for something so serious I’m not convinced a few days here or there makes much difference.

Aminex

Aminex has raised £1.85m from their two largest shareholders and some directors in order to drive forward value in Kiliwani, now that Ruvuma needs no capex from AEX. Getting Kiliwani going where there are already Government approvals and an existing GSA makes sense as ‘the molecules we produce there are very high value’. It is understandable that shareholders consider this odd but the process could add value in an area that the company at least has some control of.

Zenith Energy

Zenith has announced two offerings, one in Canada raising C$518,232 ( discount 17%) and one in the UK raising £303,080 (discount 13%). Operationally the company continue with cleanout operations, in well C-26 they have found production casing damage rendering the well unsuitable for deepening operations, at C-37 work continues. More kit is being deployed to Azerbaijan all the time for the winter campaign.

SDX Energy

From yesterday as I was in the Morocco Summit, ironically spending some time with SDX Energy who had just announced these two new licences in Morocco. Effectively the company is strengthening its position in its back yard of the Gharb Basin with these two deals. The Moulay Bouchta Ouest licence (SDX 75% WI and operator) has been awarded for the statutory 8 years and SDX has a commitment to reprocess 150 km of 2D seismic data and acquire 100km²of new 3D seismic and drill one exploration well in the next 3 1/2 years.

The company has also been re-awarded the Lalla Mimouna Sud licence (SDX 75% and operator), also for 8 years but this licence was part of the Circle Oil deal done in 2017 which expired after work commitments had been fulfilled. SDX reapplied after the acquisition of additional 3D seismic data and have now agreed a further commitment to acquire 50km² of 3D seismic and to drill one well within a  three year period.

This deal seems to make a lot of sense to SDX as it significantly increases hydrocarbon potential, located near the company’s  infrastructure to make it easy and quick to handle and of course it gives them control over effectively the whole Gharb Basin.

Genel Energy

A Tawke update from Genel yesterday where gross production averaged 113,041 b/d during 2018, at Peshkabir production for the six wells in January 2019 averaged 54/- b/d with P-9 completed and ready to go on to production this month. The P-10 well is due to spud in mid-Feb as part of a four well 2019 forward drilling programme. At Tawke there will be up to 14 new wells this year of which 10 are currently approved as firm, this will stabilise production at the field.

United Oil & Gas/Prospex Oil & Gas

Good news from these two companies yesterday as they announced a new CPR for the Selva field in Italy which gives United, after recent positive announcements, net 2P reserves attributable to them of 2.7 BCF. For Prospex it is a net 2P number of 2.26 BCF and production is expected to start in 2020 at a gross rate of up to 150/- cubic metres per day.

Morocco Summit

The Morocco Summit concluded last night and the overall view was that it has been a resounding success. With a day of highly technical work keeping the participants, including UK companies, on their toes followed by a day of presentations anyone involved in the country would have been fully briefed across the board.

With a key policy speech from the Minister (albeit in 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30559/vsa-capital-market-movers---anglo-african-agriculture-30559.html VSA CAPITAL MARKET MOVERS - Anglo African Agriculture https://www.oilcapital.com/columns/vsa-capital-market-movers/30559/vsa-capital-market-movers---anglo-african-agriculture-30559.html Thu, 31 Jan 2019 15:59:00 +0000

VSA Morning Agri Comment, 31/01/19

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Anglo African Agriculture#: Update

Anglo African Agriculture (LON:AAAPhas released a update on its business and corporate activities.

  • Dynamic Intertrade, its wholly-owned South African spice trading business, delivered a positive EBITDA for the year-ended 31 October 2018, compared with a loss of c.£400k in the year before.
  • Significant YoY improvement in EBITDA at its 46.8%-owned agricultural products trading subsidiary, Dynamic Intertrade Agri, which should enable a positive contribution from associate on its FY 2018 P&L (from a loss of c.£10k in FY 2017).
  • Kenyan Port Authority approval has been received for construction of an LPG facility on land owned by privately-owned Comarco in the port of Mombasa. As a reminder AAAP has an option to acquire this land for nominal consideration should its 2-year 12-15% US$1m loan made in November 2018 not be repaid. Comarco will generate both base rental and usage income from the LPG facility operator and should increase the amount of associated logistics opportunities available to the group.  
  • “The Company continues to work with Comarco to help develop its future which the Board believes will bring additional value to AAAP.”
  • Full-year results expected mid-February 2019

Risers and Fallers (Last Close)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Agriterra

1.81

8.50

0.50

+6.3%

Anglo-Eastern Plantations

219.59

554.00

17.00

+3.2%

Obtala

26.08

6.25

0.15

+2.5%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

DekelOil

12.86

3.65

(0.15)

-3.9%

Carr's Group

151.92

165.25

(3.50)

-2.1%

Devro

262.01

157.00

(2.80)

-1.8%

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30555/vsa-morning-miner---shefa-yamim-30555.html VSA Morning Miner - Shefa Yamim https://www.oilcapital.com/columns/vsa-capital-market-movers/30555/vsa-morning-miner---shefa-yamim-30555.html Thu, 31 Jan 2019 12:03:00 +0000 Shefa Yamim (LON:SEFA)

 

Shefa Yamim (LON:SEFA) has announced the latest and final results from its most recent bulk sampling programme on Zone 2 of the Kishon Mid Reach project. A total of 2,909t were collected across five samples of basal gravels with an overall grade of 135.3cpht across all gemstone types including garnet and spinel. The grade of sapphires, Carmel sapphire, rubies, moissanite and hibonite across the bulk samples was 10.37cpht across this series of samples.

SEFA intend to carry out further bulk sampling in Q2 2019 with three further samples from zone 2. We also expect additional near term newsflow from the release of the Technical Economic Evaluation Report which is likely to give insight into potential capital and operating costs and the company is therefore continuing to make progress towards trial mining.

In addition, SEFA is making progress on the marketing front. SEFA reports jeweller, Yossi Harari, is close to finalising a collection of unique 24k gold pieces incorporating gemstones from Shefa Yamim.

We reiterate our Speculative Buy recommendation.     

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https://www.oilcapital.com/columns/the-pay-zone/30550/president-range-genel-30550.html President, Range, Genel https://www.oilcapital.com/columns/the-pay-zone/30550/president-range-genel-30550.html Thu, 31 Jan 2019 11:08:00 +0000 President Energy

President has supplied the market with 2018 unaudited highlights this morning which confirm a ‘dramatic improvement ‘ from the previous year. A 160% increase in turnover to $47.2m (17.9), adjusted EBITDA in excess of $16m (loss 1.4) giving operational profit of $14.3 (loss 4.3).  Perhaps more tellingly the free cash generation was up 498% to $21.5m (3.6) and well operating costs per barrel decreased 16% to $29.50 ($35.05).

The company says that these figures show that they ‘have not been materially adversely affected by recent macroeconomic turbulence in Argentina’ with equity and bond bourses recovering and a much more stable forex rate.

Production this year continues to be sustained at 3,300 boepd in particular from the now core Rio Negro assets which show a y/y improvement of some 70%. This year will see six workovers of currently shut in producing wells together with additional reactivations scheduled to commence at the end of March. To add to that a drilling programme of both oil and gas wells will get under way which have the potential to ‘materially increase production ‘ and after last year who would bet against it. The focus on gas is of some significance as explained by Peter Levine in the recent conference call, where he detailed the advantages that it would offer. The company will, by the second half not only be producing enough gas to power its own fields but be selling gas through its own pan-regional pipeline network as well as selling electricity to the national grid.

I expect the excellent performance from last year to carry on in 2019 and for President to continue to deliver the goods this year. With a substantial drilling programme and the ability to sniff out more M&A opportunities they have all the bases covered for ‘exponential growth ‘ as they put it, couldn’t phrase it better myself, certainly huge upside potential from here.

Range Resources

Range has released its quarterly activities report for 4Q 2018, production suffered as did many with the weather but was only slightly lower at 572 bopd. The company is focusing on balance sheet restructuring and is in continuing discussions with the debt holder to reach a solution ‘for the benefit of all parties’.

The company is also continuing to reduce costs of the Trinidad operation and maintain their $6m of cash. Notwithstanding that they are progressing key exploration studies at the St Mary’s block wh8ch is potentially one of the most prospective onshore blocks in Trinidad. It is in a proven basin with world class source rock and on a good trend with the Shell operated Central Block. With a number of other blocks being progressed such as at Morne Diablo there appears to be some light at the end of the tunnel in this exciting oil province.

Genel Energy

Genel has announced that they have agreed with the KRG to extend the deadline to meet the conditions precedent related to the Bina Bawi gas lifting agreement until 30 April 2019 ‘ allowing time to finalise the ongoing commercial discussion’. This is further good news from Genel who have much going on at the moment that bodes well for the future.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30549/vsa-capital-market-movers---dekeloil-public-q4-production-update--cashew-acquisition-30549.html VSA Capital Market Movers - DekelOil Public#: Q4 Production Update & Cashew Acquisition https://www.oilcapital.com/columns/vsa-capital-market-movers/30549/vsa-capital-market-movers---dekeloil-public-q4-production-update--cashew-acquisition-30549.html Thu, 31 Jan 2019 11:05:00 +0000 On 10 January Côte d'Ivoire agricultural company DekelOil Public Limited (LON:DKL) announced its production update for Q4 2018. At the end of 2018 it also announced that it was taking a 43.8% equity stake in the 10,000tpa (expandable to 30,000tpa) Tiebissou cashew processing project in Cote d'Ivoire, having previously owned an option over the project.
2018 Production in-line with VSA Forecasts

Although Q4 production was not as high as we had hoped it might be following the +15% YoY increase seen in Q3, DKL’s FY 2018 fresh fruit bunch (FFB) collection (146,036t) and crude palm oil (CPO) production (33,077t) figures were in-line with our forecasts. With palm kernel oil (PKO) sales and palm kernel cake (PKC) sales significantly higher than we had estimated, and DKL achieving a premium over the European benchmark CPO price in H2, we believe our previous financial forecasts for FY 2018 were too conservative (revenue of c€20m and net loss of c€3m) and have adjusted accordingly.

Although never guaranteed, in agriculture low production years are often followed by high production years. We are therefore hopeful that H1 2019 will be a positive one for DKL. Recent CPO price increases, if sustained, could also help deliver an improved financial performance in FY 2019.

Strong Start to 2019 for Crude Palm Oil Prices

CPO prices have increased early in 2019 as perceived progress in the China/US trade talks and weather worries in South America have lifted the edible oil complex. More specific to palm oil, we are now entering the low production season in South East Asia and there are signs that demand is picking up from key consuming countries. On the bearish side, the gasoil to palm oil premium has disappeared, reducing the attractiveness of palm-based biodiesel, just as Indonesia and Malaysia implement increased blending mandates.

Recommendation and Target Price

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

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https://www.oilcapital.com/columns/the-pay-zone/30547/oil-price-ophir-anglo-african-and-finally-30547.html Oil price, Ophir, Anglo African And finally… https://www.oilcapital.com/columns/the-pay-zone/30547/oil-price-ophir-anglo-african-and-finally-30547.html Wed, 30 Jan 2019 10:27:00 +0000 WTI $53.31 +$1.32, Brent $61.32 +$1.39, Diff -$8.01 +7c, NG $2.95 +4c

Oil price

Oil rallied yesterday, trade talks between the USA and China resume today amid a growing feeling that something may be done, indeed Mnuchin actually said ‘anything is possible’. On the Venezuela front the increased sanctions on PDVSA will do harm and also to US refiners who are dependent on whatever crude that they can get from the country.

Finally the weather is very cold in the US and expect to see some alteration in product levels, the API stats showed a much smaller crude build than expected but also modest increases in gasoline and distillates. EIA numbers tonight will firm up the situation.

Ophir Energy- Another one bites the dust…

The board of Ophir has agreed to a cash bid of 55p a share from Medco as widely signalled in recent weeks. Indeed the way that this has been conducted leaves one with little option to surmise that this bid, in all its guises, has been around for quite some time. It values Ophir at £390.6m and will be by scheme of arrangement which might take some time. The company comments that 55p is ‘upfront value’ for shareholders which is a bit rich as if you look at the shares going back it traded above this level for most of 1H 2018….

Anglo African Oil & Gas

AAOG have announced that the TLP-103c well at the Tilapia field in the Republic of Congo encountered hydrocarbons in the Djeno horizon. Wireline logging confirms a 12m oil column making 56m across the total identified horizons and the company are confident of further Djeno reservoir below this discovery prognosed to be in sandstone. These sands will be tested by the TLP-104 well due to the poor performance of the current rig and the condition of the topside facilities and therefore be some time off.

There is little doubt that this is a good news bad news type of discovery, undoubtedly the potential of the Djeno is good news especially if the deeper sandstone is found in large quantities with the next well. Also good news is that the current rig seems to be able to be a producer from the Mengo and shallower sands which should bring in cash flow in the shorter term. The bad news is that because of the state of the equipment, the Djeno can’t be tested or produced now and that the company do not have the cash resources at present for the topside upgrade or the new rig. That means only one thing, further recourse to shareholders whom they have only recently touched for £6m at around today’s price and probably to the tune of twice or more what they raised before. Patient shareholders will be pleased that a discovery has been made but will have to dig deep again before long but at least the well, eventually, came in…

And finally…

The Premier League returned last night and the Magpies did Liverpool a huge favour by beating the Noisy Neighbours, Klopp must feel that little can stop them from winning the title now. The Gooners won last night and the Red Devils rescued a draw, just like the old days in Fergie time against Burnley.

Tonight Liverpool host the Foxes, Chelski are at the Cherries and Spurs host the Hornets at Wembley.

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30533/vsa-capital-market-movers---egdon-resources-30533.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30533/vsa-capital-market-movers---egdon-resources-30533.html Fri, 25 Jan 2019 10:37:00 +0000

VSA Morning Flow Test, 25/01/19

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Egdon Resources (LON:EDR)

Egdon Resources (EDR LN) has announced that its appeal against the refused planning application at the Wressle site has been successful. This will extend the existing planning consent until January 24 2020 providing EDR with sufficient time to submit an appeal to enable the company to develop the Wressle oilfield.

This appeal to develop the site is likely to be lodged in the coming week and having, in our view, fully addressed the reasons highlighted by the Planning Inspector for initial refusal we believe EDR is well placed given the support from expert planning officers and independent third parties.

We reiterate our Buy recommendation and 50p target price.

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30528/savannah-premier-30528.html Savannah, Premier https://www.oilcapital.com/columns/the-pay-zone/30528/savannah-premier-30528.html Thu, 24 Jan 2019 13:09:00 +0000 Savannah, Premier

 

 

Savannah Petroleum

Savannah has announced the successful placing of 62.8m shares with new and existing shareholders at 28p raising $23m. The raise is for working capital and the company remains on schedule to sign the Seven Energy implementation agreement by the end of January and complete the deal in the current quarter. When the deal is completed the company will receive a$90m cash injection and will then be strongly placed to bed in the transaction. Highlights include the exposure to the gas value chain in south east Nigeria and will exponentially increase value in the company especially when the successful campaign in Niger is added to later this year.

Premier Oil

Premier have announced the initial results of the appraisal well on Block 7, offshore Mexico which has come in with 152m of net pay above the OWC as expected. The73% net to gross ratio was higher than expected and the reservoir quality unsurprisingly in line with Zaza-1. The well was deepened to evaluate the Marte prospect which was dry as expected by Premier at least. The well will now be side-tracked updip for coring and a DST of the Zama reservoir. All good news for Prems who’s excellent operational performance continues even though the shares are undeservedly low at 70p.

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30525/vsa-capital-market-movers---central-asia-metals-30525.html VSA CAPITAL MARKET MOVERS - Central Asia Metals https://www.oilcapital.com/columns/vsa-capital-market-movers/30525/vsa-capital-market-movers---central-asia-metals-30525.html Thu, 24 Jan 2019 11:40:00 +0000

Central Asia Metals#: Q4 2018 Operations Update

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2018 Production Ahead of Estimates

Central Asia Metals (LON:CAML) beat our full year production estimates across copper, lead and zinc owing to continued strong operational performance. Copper production of 3.36kt in Q4 2018, up 8% YoY meant full year production of 14kt, in line with 2017 production, at the top end of full year guidance and 2% ahead of our forecast. Sasa zinc production of 5.8kt in Q4 2018 was up 8% YoY resulting in 2018 output of 22.53kt, up 4% YoY and ahead of our forecast by 1%. Lead production of 7.40kt was flat YoY meaning 29.39kt through 2018 although down 2% YoY was 2% ahead of our forecasts.

Guidance for 2019 Implies Continued Robust Output

CAML has provided 2019 guidance broadly in line with our existing forecasts. At Kounrad guidance of 12.5-13.5kt for 2019 is 0.5kt lower than 2018 and 2% lower than our prior estimate of 13.75kt. This is due to the higher contribution from the Western dumps in 2019 (c70%). At Sasa guidance for zinc and lead output is unchanged from 2018 at 22-24kt and 28-30kt respectively. We anticipate 2019 production of 28.6kt lead and 22.2kt of zinc.

Rising Free Cash Flow Generation

Despite a reduction in 2018 forecasts reflecting weaker commodity prices in H2 2018 we have reduced our revenue, EBITDA and net income estimates by 3%, 5% and 8% to US$198m, US$122m and US$50m respectively. Net income continues to reflect a one-off legacy tax charge meaning our 2018F dividend estimate is reduced to 13.85p/sh. However, lower capital spending and a continued low cost base imply a 33%increase in FCF to US$88m in 2019F.

Recommendation and Target Price

Trading on a dividend yield of 6% highlights the ongoing value opportunity and we expect the shares to outperform as FCF generation continues to increase in 2019 and 2020.

We reiterate our Buy recommendation and target price of 309p which implies 33% upside and 40% on a total return basis.

 

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https://www.oilcapital.com/columns/the-pay-zone/30521/oil-price-genel-igas-block-zenith-petro-matad-and-finally-30521.html Oil price, Genel, IGas, Block, Zenith, Petro Matad And finally… https://www.oilcapital.com/columns/the-pay-zone/30521/oil-price-genel-igas-block-zenith-petro-matad-and-finally-30521.html Wed, 23 Jan 2019 12:38:00 +0000 Oil price, Genel, IGas, Block, Zenith, Petro Matad And finally…

 

 

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

Oil price

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

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

Genel Energy

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

IGas Energy

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

Block Energy

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

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

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

Zenith Energy

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

Petro Matad

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

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

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

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

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

And finally…

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

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

 

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https://www.oilcapital.com/columns/the-pay-zone/30514/amerisur-cairn-30514.html Amerisur, Cairn https://www.oilcapital.com/columns/the-pay-zone/30514/amerisur-cairn-30514.html Tue, 22 Jan 2019 14:14:00 +0000 Amerisur, Cairn

 

 

Amerisur Resources

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

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

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

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

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

Cairn Energy

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

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

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

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

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30511/vsa-capital-market-movers---egdon-resources-30511.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30511/vsa-capital-market-movers---egdon-resources-30511.html Tue, 22 Jan 2019 09:25:00 +0000

VSA Morning Flow Test, 22/01/19

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Egdon Resources (LON:EDR)

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

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

We reiterate our Buy recommendation and 50p target price.
 

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30510/vsa-capital-market-movers---m2-cobalt-30510.html VSA CAPITAL MARKET MOVERS - M2 Cobalt https://www.oilcapital.com/columns/vsa-capital-market-movers/30510/vsa-capital-market-movers---m2-cobalt-30510.html Tue, 22 Jan 2019 09:23:00 +0000

VSA Morning Miner, 22/01/19

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M2 Cobalt (CVE:MC)

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

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

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

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30507/oil-price-hurricane-genel-vog-falcon-empyrean-and-finally-30507.html Oil price, Hurricane, Genel, VOG, Falcon, Empyrean And finally... https://www.oilcapital.com/columns/the-pay-zone/30507/oil-price-hurricane-genel-vog-falcon-empyrean-and-finally-30507.html Mon, 21 Jan 2019 15:02:00 +0000 Oil price, Hurricane, Genel, VOG, Falcon, Empyrean And finally…

 

 

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

Oil price

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

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

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

Hurricane Energy

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

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

 

Genel Energy

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

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

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

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

Victoria Oil & Gas

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

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

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

Falcon Oil & Gas

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

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

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

Empyrean Energy

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

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

And finally…

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

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

 

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https://www.oilcapital.com/columns/the-pay-zone/30500/daily-blog-oil-price-anglo-african-oil--gas-and-finally-30500.html Daily Blog: Oil price, Anglo African Oil & Gas And finally... https://www.oilcapital.com/columns/the-pay-zone/30500/daily-blog-oil-price-anglo-african-oil--gas-and-finally-30500.html Fri, 18 Jan 2019 11:27:00 +0000 Oil price, Anglo African Oil & Gas And finally…

 

 

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

Oil price

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

Anglo African Oil and Gas

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

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

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

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

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

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

And finally…

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

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

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

 

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https://www.oilcapital.com/columns/the-pay-zone/30494/jersey-oil--gas-president-energy-30494.html Jersey Oil & Gas, President Energy https://www.oilcapital.com/columns/the-pay-zone/30494/jersey-oil--gas-president-energy-30494.html Thu, 17 Jan 2019 10:50:00 +0000 Jersey Oil & Gas, President Energy

 

 

Jersey Oil & Gas

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

President Energy

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

Core Finance CEO interview: Peter Levine of President Energy

Voxmarkets Podcast

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

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

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

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30488/vsa-capital-market-movers---lake-resources-30488.html VSA CAPITAL MARKET MOVERS - Lake Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30488/vsa-capital-market-movers---lake-resources-30488.html Thu, 17 Jan 2019 09:05:00 +0000

VSA Morning Miner, 17/01/19

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Lake Resources (ASX:LKE

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

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

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

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

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30486/oil-price-reabold-eco-atlantic-ophir-touchstone-and-finally-30486.html Oil price, Reabold, Eco Atlantic, Ophir, Touchstone And finally… https://www.oilcapital.com/columns/the-pay-zone/30486/oil-price-reabold-eco-atlantic-ophir-touchstone-and-finally-30486.html Wed, 16 Jan 2019 11:38:00 +0000 Oil price, Reabold, Eco Atlantic, Ophir, Touchstone And finally…

 

 

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

 

Oil price

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

Reabold Resources/Upland Resources

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

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

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

 

Eco Atlantic Oil & Gas

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

Ophir

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

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

Touchstone

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

And finally…

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

 

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https://www.oilcapital.com/columns/the-pay-zone/30475/daily-blog-oil-price-sdx-ophir-premier-rose-petroleum-and-finally-30475.html Daily Blog: Oil price, SDX, Ophir, Premier, Rose Petroleum And finally... https://www.oilcapital.com/columns/the-pay-zone/30475/daily-blog-oil-price-sdx-ophir-premier-rose-petroleum-and-finally-30475.html Mon, 14 Jan 2019 13:44:00 +0000 Oil price, SDX, Ophir, Premier, Rose Petroleum And finally…

 

 

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

Oil price

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

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

SDX Energy

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

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

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

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

Ophir Energy

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

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

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

Premier Oil

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

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

Rose Petroleum- Erratum

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

 

And finally…

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

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

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30473/vsa-capital-market-movers---tectonic-gold-30473.html VSA CAPITAL MARKET MOVERS - Tectonic Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30473/vsa-capital-market-movers---tectonic-gold-30473.html Mon, 14 Jan 2019 09:19:00 +0000

VSA Morning Miner, 14/01/19

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Tectonic Gold (LON:TTAU)

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

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

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

We reiterate our Speculative Buy recommendation.

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30464/daily-blog-oil-price-premier-petromatad-angus-aminex-and-finally-30464.html Daily Blog: Oil price, Premier, PetroMatad, Angus, Aminex And finally... https://www.oilcapital.com/columns/the-pay-zone/30464/daily-blog-oil-price-premier-petromatad-angus-aminex-and-finally-30464.html Thu, 10 Jan 2019 14:57:00 +0000 Oil price, Premier, PetroMatad, Angus, Aminex And finally…

 

 

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

Oil price

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

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

Premier Oil

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

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

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

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

Petro Matad

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

Angus Energy- You couldn’t make it up…

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

Aminex- Adding some beef…

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

And finally…

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

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30460/vsa-capital-market-movers---m2-cobalt-30460.html VSA CAPITAL MARKET MOVERS - M2 Cobalt https://www.oilcapital.com/columns/vsa-capital-market-movers/30460/vsa-capital-market-movers---m2-cobalt-30460.html Thu, 10 Jan 2019 09:40:00 +0000

VSA Morning Miner, 10/01/18

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M2 Cobalt (CVE:MC)

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

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

We reiterate our Speculative Buy recommendation.

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30458/vsa-capital-market-movers---dekeloil-public-limited-30458.html VSA CAPITAL MARKET MOVERS - DekelOil Public Limited https://www.oilcapital.com/columns/vsa-capital-market-movers/30458/vsa-capital-market-movers---dekeloil-public-limited-30458.html Thu, 10 Jan 2019 09:18:00 +0000

VSA Morning Agri Comment, 10/01/19

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DekelOil Public Limited - Q4 Production & Sales Update

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

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

VSA Comment

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

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

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

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

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

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

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


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Fallers

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30454/vsa-capital-market-movers---central-asia-metals-30454.html VSA CAPITAL MARKET MOVERS - Central Asia Metals https://www.oilcapital.com/columns/vsa-capital-market-movers/30454/vsa-capital-market-movers---central-asia-metals-30454.html Wed, 09 Jan 2019 09:23:00 +0000

VSA Morning Miner, 09/01/19

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Central Asia Metals (LON:CAML)

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

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

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

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

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

We reiterate our Buy recommendation and 309p target price.

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30452/vsa-capital-market-movers---colombus-energy-resources-30452.html VSA CAPITAL MARKET MOVERS - Colombus Energy Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30452/vsa-capital-market-movers---colombus-energy-resources-30452.html Wed, 09 Jan 2019 09:16:00 +0000

VSA Morning Flow Test, 09/01/19

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Columbus Energy Resources (LON:CERP)

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

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

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

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

We reiterate our Buy recommendation and 21.4p target price.

 

 

 

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https://www.oilcapital.com/columns/the-pay-zone/30450/oil-price-independent-oil--gas-zenith-energy-and-finally-30450.html Oil price, Independent Oil & Gas, Zenith Energy And finally… https://www.oilcapital.com/columns/the-pay-zone/30450/oil-price-independent-oil--gas-zenith-energy-and-finally-30450.html Tue, 08 Jan 2019 14:08:00 +0000 WTI $48.52 +56c, Brent $57.33 +27c, Diff -$8.81 -29c, NG $2.94 -10c

Oil price

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

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

Independent Oil & Gas

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

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

Zenith Energy

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

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

And finally…

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

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

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

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30445/vsa-capital-market-movers---egdon-resources-30445.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30445/vsa-capital-market-movers---egdon-resources-30445.html Tue, 08 Jan 2019 09:31:00 +0000

VSA Morning Flow Test, 08/01/18

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Egdon Resources (LON:EDR)

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

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

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

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

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


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30441/vsa-capital-market-movers---shefa-yamim-30441.html VSA CAPITAL MARKET MOVERS - Shefa Yamim https://www.oilcapital.com/columns/vsa-capital-market-movers/30441/vsa-capital-market-movers---shefa-yamim-30441.html Mon, 07 Jan 2019 09:35:00 +0000

VSA Morning Miner, 07/01/19

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Shefa Yamim (LON:SEFA)

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

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

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30437/vsa-capital-market-movers---central-asia-metals-30437.html VSA CAPITAL MARKET MOVERS - Central Asia Metals https://www.oilcapital.com/columns/vsa-capital-market-movers/30437/vsa-capital-market-movers---central-asia-metals-30437.html Fri, 04 Jan 2019 10:46:00 +0000

VSA Morning Miner, 04/01/19

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Central Asia Metals (LON:CAML)

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

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

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

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

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30425/vsa-capital-market-movers---dekeloil-30425.html VSA CAPITAL MARKET MOVERS - DekelOil https://www.oilcapital.com/columns/vsa-capital-market-movers/30425/vsa-capital-market-movers---dekeloil-30425.html Fri, 21 Dec 2018 09:55:00 +0000

VSA Morning Agri Comment, 21/12/18

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DKL Takes 43.8% Stake in Cashew Project

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

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

VSA Comment

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

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

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

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

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

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

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

 


Risers and Fallers (Last Close)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

NWF Group

74.83

153.50

4.00

+2.7%

Devro

264.68

158.60

1.60

+1.0%

Eden Research

25.07

12.10

0.10

+0.8%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Plant Health Care

17.20

9.95

(0.50)

-4.8%

Anglo-Eastern Plantations

236.23

596.00

(25.00)

-4.0%

Genus

1,414.08

2,180.00

(74.00)

-3.3%


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30424/vsa-capital-market-movers---tectonic-gold-30424.html VSA CAPITAL MARKET MOVERS - Tectonic Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30424/vsa-capital-market-movers---tectonic-gold-30424.html Fri, 21 Dec 2018 09:52:00 +0000

VSA Morning Miner, 21/12/18

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Tectonic Gold (LON:TTAU)

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

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

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

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

We reiterate our Speculative Buy recommendation.


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30409/vsa-capital-market-movers---exore-resources-30409.html VSA CAPITAL MARKET MOVERS - Exore Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30409/vsa-capital-market-movers---exore-resources-30409.html Tue, 18 Dec 2018 09:41:00 +0000

VSA Morning Miner, 18/12/18

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Exore Resources (ASX:ERX)

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

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

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

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

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

We reiterate our Speculative Buy recommendation.

 

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30408/vsa-capital-market-movers---egdon-resources-30408.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30408/vsa-capital-market-movers---egdon-resources-30408.html Tue, 18 Dec 2018 09:36:00 +0000

VSA Morning Flow Test, 18/12/18

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Egdon Resources (LON:EDR)

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

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

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


 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30407/vsa-capital-market-movers---redt-energy-30407.html VSA CAPITAL MARKET MOVERS - redT energy https://www.oilcapital.com/columns/vsa-capital-market-movers/30407/vsa-capital-market-movers---redt-energy-30407.html Tue, 18 Dec 2018 09:33:00 +0000

VSA Morning Alternative Energy Comment, 18/12/18

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redT energy#: Year-End Update

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

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

VSA Comment

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

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

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

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


Risers and Fallers (Last Close)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Rurelec

3.9

0.7

0.10

+16.7%

Sabien Technology

0.7

0.1

0.01

+13.6%

redT energy

50.2

6.4

0.45

+7.6%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Aggregated Micro Power

41.0

95.0

(7.50)

-7.3%

Advanced Power Components

11.9

6.6

(0.50)

-7.0%

Ilika

14.4

14.2

(1.00)

-6.6%


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30390/vsa-capital-market-movers---bacanora-lithium-back-sonora-convinced-by-site-visit-30390.html VSA CAPITAL MARKET MOVERS - Bacanora Lithium: Back Sonora; Convinced by Site Visit https://www.oilcapital.com/columns/vsa-capital-market-movers/30390/vsa-capital-market-movers---bacanora-lithium-back-sonora-convinced-by-site-visit-30390.html Thu, 13 Dec 2018 09:23:00 +0000

Bacanora Lithium#: Back Sonora; Convinced by Site Visit

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Pilot Plant and Offtakes De-Risk Sonora

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

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

Lithium Fundamentals Continue to Strengthen

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

Recommendation and Target Price

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

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


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30373/vsa-capital-market-movers---exore-lake-30373.html VSA CAPITAL MARKET MOVERS - Exore, Lake https://www.oilcapital.com/columns/vsa-capital-market-movers/30373/vsa-capital-market-movers---exore-lake-30373.html Mon, 10 Dec 2018 09:34:00 +0000

VSA Morning Miner, 10/12/18

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Exore Resources (ASX:ERX)

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

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

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

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

We reiterate our Speculative Buy recommendation.

Lake Resources (LKE AU)#

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

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

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

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

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

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

 

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30366/vsa-capital-market-movers-egdon-resources-30366.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30366/vsa-capital-market-movers-egdon-resources-30366.html Fri, 07 Dec 2018 10:26:00 +0000

VSA Morning Flow Test, 07/12/18

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Egdon Resources (EDR LN)#

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

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

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


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30362/vsa-capital-market-movers-redt-energy-30362.html VSA CAPITAL MARKET MOVERS - redT energy https://www.oilcapital.com/columns/vsa-capital-market-movers/30362/vsa-capital-market-movers-redt-energy-30362.html Thu, 06 Dec 2018 11:56:00 +0000

redT energy#: Valuation Update

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

Key Orders Point to Growing Market Acceptance

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

Pipeline Has Increased Threefold

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

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

Recommendation and Target Price

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


 

 

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https://www.oilcapital.com/columns/the-pay-zone/30349/oil-price-reabold-dgo-lekoil-and-finally-30349.html Oil price, Reabold, DGO, Lekoil And finally... https://www.oilcapital.com/columns/the-pay-zone/30349/oil-price-reabold-dgo-lekoil-and-finally-30349.html Mon, 03 Dec 2018 12:12:00 +0000 Oil price

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

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

Reabold Resources

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

Diversified Gas & Oil

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

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

Lekoil

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

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

And finally…

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

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

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

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30346/vsa-capital-market-movers---egdon-resources-30346.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30346/vsa-capital-market-movers---egdon-resources-30346.html Mon, 03 Dec 2018 10:01:00 +0000 Egdon Resources (LON:EDR)
Egdon Resources (LON:EDR) has announced a positive production update from Ceres where the first full month’s production averaged 1.16mncbfd (193boepd). For November alone, EDR anticipate gas revenues of at least £235k not including the sale of 17bpd of condensate over the same period. 

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

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

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30341/vsa-capital-market-movers-m2-cobalt-cvemc-30341.html VSA Capital Market Movers - M2 Cobalt (CVE:MC) https://www.oilcapital.com/columns/vsa-capital-market-movers/30341/vsa-capital-market-movers-m2-cobalt-cvemc-30341.html Fri, 30 Nov 2018 10:14:00 +0000 M2 Cobalt (CVE:MC)
M2 Cobalt (CVE:MC) has provided an update on exploration at its Bujagali licences in Central Uganda. The regional targets that were previously announced as part of the systematic phase one exploration programme have now been expanded through further infill sampling while additional targets have also been discovered in the new licenses. 

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

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

We reiterate our Speculative Buy recommendation.

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https://www.oilcapital.com/columns/the-pay-zone/30339/oil-price-iog-eco-atlantic-egdoneuropaunion-jack-and-finally-30339.html Oil price, IOG, Eco Atlantic, Egdon/Europa/Union Jack And finally… https://www.oilcapital.com/columns/the-pay-zone/30339/oil-price-iog-eco-atlantic-egdoneuropaunion-jack-and-finally-30339.html Thu, 29 Nov 2018 09:59:00 +0000 Oil price

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

Independent Oil & Gas - LON:IOG

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

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

Eco Atlantic -LON:ECO

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

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

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

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30337/vsa-capital-market-movers-shefa-yamim-30337.html VSA CAPITAL MARKET MOVERS - Shefa Yamim https://www.oilcapital.com/columns/vsa-capital-market-movers/30337/vsa-capital-market-movers-shefa-yamim-30337.html Thu, 29 Nov 2018 09:11:00 +0000 Shefa Yamim (LON:SEFA)#


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


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

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30332/vsa-capital-market-movers-m2-cobalt-lake-resources-30332.html VSA CAPITAL MARKET MOVERS - M2 Cobalt & Lake Resources. https://www.oilcapital.com/columns/vsa-capital-market-movers/30332/vsa-capital-market-movers-m2-cobalt-lake-resources-30332.html Wed, 28 Nov 2018 09:40:00 +0000

VSA Morning Miner, 28/18/18

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M2 Cobalt (CVE:MC)

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

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

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

We reiterate our Speculative Buy recommendation.  

NuLegacy Gold (CVE:NUG

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

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

We reiterate our Speculative Buy recommendation.


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30314/vsa-capital-market-movers-egdon-resources-30314.html VSA CAPITAL MARKET MOVERS - Egdon Resources https://www.oilcapital.com/columns/vsa-capital-market-movers/30314/vsa-capital-market-movers-egdon-resources-30314.html Thu, 22 Nov 2018 09:45:00 +0000 Egdon Resources (LON:EDR)

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

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

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

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

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30308/vsa-capital-market-movers-tectonic-gold-30308.html VSA CAPITAL MARKET MOVERS - Tectonic Gold https://www.oilcapital.com/columns/vsa-capital-market-movers/30308/vsa-capital-market-movers-tectonic-gold-30308.html Wed, 21 Nov 2018 09:28:00 +0000

VSA Morning Miner, 21/11/18

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Tectonic Gold (LON:TTAU)

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

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

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

We reiterate our Speculative Buy recommendation.  

 

 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30299/vsa-capital-market-movers-redt-energy-30299.html VSA CAPITAL MARKET MOVERS - redT energy https://www.oilcapital.com/columns/vsa-capital-market-movers/30299/vsa-capital-market-movers-redt-energy-30299.html Mon, 19 Nov 2018 10:13:00 +0000

VSA Morning Alternative Energy Comment, 19/11/18

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redT#: Australian Project Now Operational

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

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

VSA Comment

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

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

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

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


Risers and Fallers (Last Close)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Good Energy

17.3

104.5

15.50

+17.4%

Edenville

2.9

0.2

0.01

+2.8%

Ceres Power

222.8

165.0

3.00

+1.9%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Sabien Technologies

0.3

0.2

(0.02)

-10.3%

Biome Technologies

12.9

547.5

(52.50)

-8.7%

Plutus PowerGen

4.3

0.6

(0.02)

-4.0%


 

 

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https://www.oilcapital.com/columns/vsa-capital-market-movers/30297/vsa-capital-market-movers-dekeloil-30297.html VSA CAPITAL MARKET MOVERS - DekelOil https://www.oilcapital.com/columns/vsa-capital-market-movers/30297/vsa-capital-market-movers-dekeloil-30297.html Mon, 19 Nov 2018 10:08:00 +0000

VSA Morning Agri Comment, 19/11/18

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DekelOil#: Cashew Project Contract

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

VSA Comment

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

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

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

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


Risers and Fallers (Last Close)

Risers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Accsys Technologies

121.74

103.50

2.00

+2.0%

Plant Health Care

16.94

9.80

0.18

+1.8%

Devro

297.06

178.00

2.80

+1.6%

 

Fallers

Market Cap (£m)

Last Close (£p)

Price Movement (£p)

% Chg

Produce Investments

48.80

180.00

(9.00)

-4.8%

Anglo-Eastern Plantations

21.04

540.00

(24.00)

-4.3%

NWF Group

86.04

176.50

(4.50)

-2.5%


 

 

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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/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/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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