Whitebark Energy secures funds from strategic investor at a premium Thu, 21 Mar 2019 22:44:00 +0000 Hillcrest Petroleum gushes higher as West Hazel field crude output impresses Thu, 21 Mar 2019 19:15:00 +0000 Aminex says efforts continue to secure regulatory approvals for farm-out deal for Ruvuma asset in Tanzania Thu, 21 Mar 2019 13:50:00 +0000 EnQuest shares rally as financial results confirm confidence in Kraken Thu, 21 Mar 2019 09:38:00 +0000 VSA CAPITAL MARKET MOVERS - Bacanora Lithium Thu, 21 Mar 2019 09:31:00 +0000

VSA Morning Miner, 21/03/19

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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.




]]> Ophir Energy and Coro shares rise but Medco’s takeover intact with improved offer Thu, 21 Mar 2019 08:51:00 +0000 Sound Energy is “financially well positioned” as it looks forward to rest of 2019 Thu, 21 Mar 2019 07:53:00 +0000 Red Sky Energy completes transfer of Innamincka oil & gas licences from Beach Thu, 21 Mar 2019 03:50:00 +0000 Genex Power uses solar-hydro combination to enhance renewable offering 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.
]]> DXI Energy announces results of first well at Woodrush project 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.

]]> EQTEC jumps as largest shareholder agrees to use its gasification technology in joint venture deal Wed, 20 Mar 2019 14:23:00 +0000 DXI Energy hits gas at exploration well at Woodrush field, BC Wed, 20 Mar 2019 14:19:00 +0000 Block Energy confirms significant oil and gas shows as West Rustavi sidetrack drilling completes Wed, 20 Mar 2019 14:00:00 +0000 Highlands Natural Resources to enter cannabidiol market in Colorado with new growing operation Wed, 20 Mar 2019 13:55:00 +0000 Eland Oil & Gas reveals record revenues and maiden profit for “ground-breaking” year Wed, 20 Mar 2019 13:45:00 +0000 88 Energy's chief expects Icewine farm-out in a matter of weeks 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.

]]> Africa Energy bags an elephant and has inside track on where to find more Wed, 20 Mar 2019 09:30:00 +0000 Union Jack Oil raises £1.75mln as it looks forward to West Newton opportunity Wed, 20 Mar 2019 07:56:00 +0000 88 Energy outlines Alaska opportunities as farm-out deal moves closer Wed, 20 Mar 2019 07:33:00 +0000 Independent and small-cap oilers drive growth in the UK North Sea Wed, 20 Mar 2019 07:00:00 +0000 Buru Energy retains speculative buy rating from Taylor Collison Wed, 20 Mar 2019 05:46:00 +0000 Red Sky Energy completes share placement to raise $342,000 for project development Wed, 20 Mar 2019 04:18:00 +0000 Highlands Natural Resources PLC launches offer on PrimaryBid for its new CBD subsidiary Tue, 19 Mar 2019 16:55:00 +0000 Highlands Natural Resources PLC (LON:HNR) CEO Robert Price tells Proactive Investors the Colorado-based oil and gas company is entering the CBD market, creating a subsidiary called Zoetic Organics.

Price says Highlands is launching a fundraising today for investors on, the UK-based online platform that allows investors access to discounted equity offerings of publicly listed companies.

]]> SDCL has first mover advantage as energy efficiency becomes mainstream Tue, 19 Mar 2019 14:05:00 +0000 Wood Group losses narrow as revenues rose strongly in 2018 Tue, 19 Mar 2019 13:10:00 +0000 Mosman Oil and Gas kicks off Stanley-2 drilling Tue, 19 Mar 2019 12:30:00 +0000 Q2 'the one to watch' for Tlou Energy as it approaches key milestones Tue, 19 Mar 2019 10:04:00 +0000 Tlou Energy Limited's (LON:TLOU) Tony Gilby caught up with Proactive London's Andrew Scott to update on its drilling programme in Botswana.

Two development pods – each containing three wells - have been completed and they are now de-watering prior to controlled gas flows.

Looking ahead, Gilby says the second quarter of 2019 will be the one to watch for the company with news expected on its Request for Proposal (RFP) for Development of CBM fuelled power plants, gas production from its Lesedi wells, developments around a potential funding package to get the gas into the grid as well as progress towards securing the final downstream environmental approvals.

]]> AFC Energy chooses its preferred partner for fuel cell manufacturing Tue, 19 Mar 2019 09:05:00 +0000 Hurricane Energy shares rise as it hooks up Aoka Mizu FPSO to Lancaster field Tue, 19 Mar 2019 08:48:00 +0000 Bass Oil continues strong monthly oil production at Tangai Sukananti onshore Indonesia Tue, 19 Mar 2019 01:05:00 +0000 Iofina reported record crystalline iodine levels in 2018 and expects first-half 2019 production to grow Mon, 18 Mar 2019 15:43:00 +0000 Oil price, Eco Atlantic, Range Resources And finally… 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.

]]> Eco Atlantic Oil & Gas's Guyana prospects estimated to have 3.98bn barrels of potential resources Mon, 18 Mar 2019 13:35:00 +0000 Tlou Energy completes second coal bed methane well pod Mon, 18 Mar 2019 12:25:00 +0000 Israel gas fields in spotlight as Delek reportedly mulls London spin-out Mon, 18 Mar 2019 11:38:00 +0000 Tlou Energy may be set for significant upside as CBM project advances Mon, 18 Mar 2019 10:00:00 +0000 US Oil & Gas continues in permitting process as it seeks to frack Nevada well Mon, 18 Mar 2019 07:49:00 +0000 Buru Energy ships 70,000 barrels of oil in March lifting as production remains steady at Ungani Mon, 18 Mar 2019 05:15:00 +0000 Whitebark Energy expects to further increase reserves at Wizard Lake in Canada Mon, 18 Mar 2019 03:15:00 +0000 The need for Plexus Holdings' POS-GRIP technology 'becoming more critical' Fri, 15 Mar 2019 10:17:00 +0000 Plexus Holdings PLC (LON:POS) Ben Van Bilderbeek tells Proactive London's Andrew Scott he's encouraged by an increasing level of incoming enquiries for its POS-GRIP-enabled products.

This week the oilfield services group announced it's to pay out a £1mln interim dividend following the sale of its jack-up rig wellhead rental business. 

The balance sheet is also being restructured so that it can make additional payments in future.

]]> Touchstone Exploration seeing production from all 11 wells drilled last year Fri, 15 Mar 2019 10:17:00 +0000 Touchstone Exploration (TSX:TXP) President and CEO Paul Baay joined Steve Darling from Proactive Investors Vancouver on Skype to provide and update on January and February’s numbers. Crude Oil sales of 1994 barrels per day in January and 2,179. barrels per day in February.
Baay also talked about some early number on march production and also provided and update on the progress of the Ortoire property.

]]> Cairn Energy downgraded sharply as City is made to wait for India decision Fri, 15 Mar 2019 09:27:00 +0000 BPC raises US$2.54mln to tick over whilst farm-out continues Fri, 15 Mar 2019 08:51:00 +0000 UK Oil & Gas reports Horse Hill production milestones as ‘testing’ continues Fri, 15 Mar 2019 07:56:00 +0000 Whitebark Energy Ltd increases 2P Oil Reserves by 70%, sees another 12 possible well locations Fri, 15 Mar 2019 00:40:00 +0000 FAR Ltd's Cath Norman calls US investors' response to its northwest Africa project 'terrific' Thu, 14 Mar 2019 15:27:00 +0000 FAR Ltd (ASX: FAR) Managing Director Cath Norman visited the Proactive Investors' New York studio Thursday to update US investors on the company's assets in northwest Africa, saying the reaction from investors has been 'terrific.'

Norman says the oil exploration company has drilled 11 oil wells in off-shore Senegal since the project began in 2014 and expects to be in oil production by 2022.

]]> VSA CAPITAL MARKET MOVERS - redT energy, Placing and Strategic Review 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.

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Proton Power Systems







]]> Point Loma Resources' proved oil reserves increase 64% year-over-year, thanks to Rex well Thu, 14 Mar 2019 14:53:00 +0000 VSA CAPITAL MARKET MOVERS - M2 Cobalt 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.


]]> Eland Oil & Gas boosts loan facility as value of OML40 field soars Thu, 14 Mar 2019 09:31:00 +0000 Europa Oil & Gas hands over operatorship of Holmwood to UKOG Thu, 14 Mar 2019 08:09:00 +0000 Touchstone Exploration boosted by continued optimisation of new production wells Thu, 14 Mar 2019 07:21:00 +0000 Carnarvon Petroleum non-executive director buys more shares on market Thu, 14 Mar 2019 03:36:00 +0000 Flexible Solutions International shares jump on news of annual dividend Wed, 13 Mar 2019 17:25:00 +0000 Jadestone Energy primed to expand as Asia-Pacific oil province matures Wed, 13 Mar 2019 16:25:00 +0000 Cantor Fitzgerald keeps ‘buy’ on 88 Energy despite chopping back its target price after Winx-1 disappointment Wed, 13 Mar 2019 14:29:00 +0000 Proger offers Cadogan Petroleum growth at a good entry price, says CEO Michelotti Wed, 13 Mar 2019 12:01:00 +0000 Cadogan Petroleum PLC’s (LON:CAD) chief executive Guido Michelotti explains the reasons behind the convertible loan to Italian engineer Proger.

It  offers growth at a managed level of risk with a good entry price, he told Proactive.

Accountant PWC has carried out extensive due diligence on Proger’s business plan and concluded it is realistic.

The loan is also convertible at valuation of Proger at the start of 2017, so already some upside is built in says Michelotti.

Cadogan’s oil production from UKraine, meanwhile, is stable at around 230 barrels per day while the Blazh-10 exploration well is on track to hit target depth in April.

]]> Bénin adds another great prospect to an already exciting portfolio - United Oil's CEO Wed, 13 Mar 2019 11:25:00 +0000 Brian Larkin, chief executive of United Oil & Gas PLC (LON:UOG), caught up with Proactive London's Andrew Scott after announcing an expansion of its asset portfolio - adding a frontier exploration project in West Africa.

UOG's inked an option deal which will allow it to acquire a 20% stake in the Bénin Onshore Block B.

]]> VSA CAPITAL MARKET MOVERS - Colombus Energy 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.


]]> Mosman Oil and Gas starts Stanley-1 well recompletion Wed, 13 Mar 2019 09:29:00 +0000 Plexus Holdings to pay out £1mln through interim dividend Wed, 13 Mar 2019 08:30:00 +0000 Tlou Energy positive as Botswana tender passes technical phase Wed, 13 Mar 2019 08:18:00 +0000 88 Energy’s latest analysis reveals disappointing result for Alaska exploration well Wed, 13 Mar 2019 08:15:00 +0000 Columbus Energy looks forward to start of Inniss-Trinity enhanced recovery pilot Wed, 13 Mar 2019 08:05:00 +0000 Po Valley Energy intends supplying gas to large Italian market Wed, 13 Mar 2019 07:38:00 +0000 Carnarvon Petroleum oil and gas story expected to have many more pages Wed, 13 Mar 2019 06:06:00 +0000 i3 Energy raises £16mln via share placing to fulfil Liberator field drill plans Tue, 12 Mar 2019 15:30:00 +0000 Block Energy's Paul Haywood on 'game-changing' move to fully acquire West Rustavi Tue, 12 Mar 2019 12:12:00 +0000 Block Energy Plc's (LON:BLOE) Paul Haywood discusses with Proactive London's Andrew Scott a recent significant increase in production at the Norio wells 44 and 27.

Haywood says current production at the Norio and Satskhenisi fields is around 60 bopd - additionally preparations are being made for the Norio field’s well 39 which will target a production rate of 10 barrels of oil per day.

He also talks through the significance of the decision to take full ownership of the West Rustavi licence.

Block already owns 25% of the asset and the new agreement with Georgian Oil and Gas Limited (GOG) will increase the stake up to 100%.

]]> Row breaks out between North Sea partners as Cairn downgrades Enquest's Kraken field Tue, 12 Mar 2019 11:43:00 +0000 Ophir Energy management reaffirms backing of Medco takeover as it releases financial results Tue, 12 Mar 2019 08:56:00 +0000 Prospex Oil and Gas raises funds for new exploration well in Romania Tue, 12 Mar 2019 08:25:00 +0000 Cairn Energy sets sights on exploration upside as asset write downs dent financial results Tue, 12 Mar 2019 07:53:00 +0000 Global Energy Ventures focused on delivering commercial marine CNG transport Tue, 12 Mar 2019 03:23:00 +0000 Global Energy Ventures Ltd (ASX:GEV) executive chairman Maurice Brand tells Proactive Investors that the company will capitalise on a niche of marine transportation for Compressed Natural Gas (CNG) by designing and building unique CNG 200 Optimum ships.

Once in operation, the ships will advance the company's portfolio of projects.

]]> Egdon Resources shares jump on ‘highly encouraging’ UK shale well results Mon, 11 Mar 2019 09:27:00 +0000 VSA CAPITAL MARKET MOVERS - Egdon Resources 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.




]]> Berkeley Energia updates on permitting at Salamanca, following half-yearly results Mon, 11 Mar 2019 08:23:00 +0000 Cairn Energy reveals delay to India arbitration result Mon, 11 Mar 2019 08:14:00 +0000 IGas Energy Springs Road well reveals significant shale sequence Mon, 11 Mar 2019 07:55:00 +0000 OPG Power Ventures on course to meet full-year expectations Mon, 11 Mar 2019 07:36:00 +0000 United Oil & Gas expands portfolio with ‘potentially transformational’ frontier exploration opportunity in West Africa Mon, 11 Mar 2019 07:29:00 +0000 Bass Oil set to drill 'a low-risk and very high-impact well' with Bunian 5 Mon, 11 Mar 2019 06:00:00 +0000 Bass Oil Ltd (ASX:BAS) managing director Tino Guglielmo updates Proactive Investors on increased reserves, increasing production, and expanded criteria in the search for additional Indonesian oil assets.

Guglielmo says, "The Buyian 5 well is going to be at least as good as the Bunyan 3 well was...  it's not a stretch for post-drill Bunian 5 to take us to our capacity. So it's a low-risk and very high-impact well for us, and as a result we're very keen to drill it."

]]> Otto Energy begins operational works to bring Lightning Well into production in Gulf Coast program Mon, 11 Mar 2019 04:25:00 +0000 Carnarvon Petroleum’s Dr Peter Moore buys $42,000 worth of stock Sun, 10 Mar 2019 21:45:00 +0000 FuelCell’s $100M debt facility with Generate Lending a positive factor, Roth says Fri, 08 Mar 2019 19:00:00 +0000 Diversified Gas & Oil agrees well retirement deal with Pennsylvania authorities Fri, 08 Mar 2019 14:50:00 +0000 Oilers shaken as Norwegian sovereign wealth fund decides to dump sector stocks Fri, 08 Mar 2019 14:29:00 +0000 ADES secures first deepwater drilling contract in Egypt deal with Dana Gas Fri, 08 Mar 2019 13:58:00 +0000 United Oil & Gas fares best as Colter consortium mulls next steps Fri, 08 Mar 2019 13:20:00 +0000 Africa Energy Corp welcomes 'gigantic' discovery on its offshore South Africa block Fri, 08 Mar 2019 12:18:00 +0000 Garrett Soden, president and chief executive of Africa Energy Corp (CVE:AFE), speaks to Proactive London's Andrew Scott soon after announcing a significant gas condensate discovery on the Brulpadda prospects which is located on its Block 11B/12B offshore South Africa.

Soden says the success at both the Brulpadda primary and secondary targets significantly de-risks four other similar prospects which have already been identified on the existing 2D seismic.

]]> Energy efficiency's time is here says manager of SDCL, London's first dedicated trust Fri, 08 Mar 2019 12:09:00 +0000 Jonathan Maxwell, chief executive of Sustainable Development Capital, explains to Proactive why the time is right for his new energy efficient fund.

The SDCL Energy Efficiency Income Trust PLC  (LON:SEIT) listed in London in December and has just made its first acquisition in the US.

SEIT is different from traditional infrastructure and renewable vehicles, which focus on supply, and is a first in London.

The trust looks at demand solutions, where there has been an explosion in energy efficient equipment over the past ten years.

Projects it backs are cost effective, green and offer energy resilience and it is a great time to be in the market says Maxwell.

The trust will pay a 5p dividend initially, but Maxwell expects the pay out to rise progressively in future.

]]> Victoria Oil and Gas raises £13.5mln to develop and expand Cameroon operations Fri, 08 Mar 2019 09:51:00 +0000 Victoria Oil & Gas PLC (LON:VOG) chief executive Ahmet Dik caught up with Proactive London's Andrew Scott after the company confirmed the result of its equity raise, with VOG successfully selling 59.35mln new shares priced at 13p each.

The placing was oversubscribed with new and existing investors taking up shares.

Dik says the capital raised will allow them to significantly strengthen its financial position and focus on the development of its operations and customer base in Cameroon.

]]> United Oil & Gas to evaluate commercialisation options as Colter appraisal completes Fri, 08 Mar 2019 07:22:00 +0000 Red Sky Energy applies for ministerial consent to acquire Innamincka Dome project Fri, 08 Mar 2019 05:10:00 +0000 Carnarvon Petroleum into S&P/ASX 300 – AC8, BGL, PAR into All Ordinaries Thu, 07 Mar 2019 22:22:00 +0000 Genie Energy swings to fourth-quarter profit as electricity company pushes into Finland and Japan Thu, 07 Mar 2019 19:00:00 +0000 Ballard Power Systems shares sink on wider-than-expected fourth-quarter loss, but beats on revenue Thu, 07 Mar 2019 17:20:00 +0000 Plug Power reports breakthrough 4Q earnings as repeat customers grow Thu, 07 Mar 2019 14:02:00 +0000 Touchstone Exploration annual review reveals 2018 reserves growth Thu, 07 Mar 2019 11:25:00 +0000 Jadestone Energy CEO believes Montara is best asset he has seen in 25 years Thu, 07 Mar 2019 10:01:00 +0000 Paul Blakeley, chief executive of Jadestone Energy Inc (LON:JSE) believes its Montara asset off the coast of Australia is one of the best opportunities he has seen in 25 years.

Jadestone specialises in extending the life of mature fields and there are big plans for Montara, which ticks all the boxes for the company, he says.

It's a very exciting time for the business, he adds.

A first well in six years at another mature oilfield Stag, also offshore Australia, is planned this year, while a new gas development should soon get underway in Vietnam.

Blakeley also believes that the Asia-Pacific region is becoming a mature province similar to the North Sea, with the major oil groups looking to divest what for them are marginal assets.

For Jadestone, these offer a huge opportunity says Blakeley.

]]> Premier Oil puts North Sea, Mexico and Falklands growth projects on agenda after record year of production Thu, 07 Mar 2019 09:14:00 +0000 Block Energy reveals “significant rise” in production rates for Norio well Thu, 07 Mar 2019 08:23:00 +0000 i3 Energy considering many viable funding options Thu, 07 Mar 2019 08:15:00 +0000 Victoria Oil & Gas reveals share placing was oversubscribed as it lands £13.5mln Thu, 07 Mar 2019 07:49:00 +0000 Sound Energy says positive talks continue for Tendrara gas sales deal Thu, 07 Mar 2019 07:13:00 +0000 Greenland Minerals signs tripartite MOU for Kvanefjeld Participation Agreement Thu, 07 Mar 2019 05:39:00 +0000 Brookside Energy shares up on production update showing strong well performance Thu, 07 Mar 2019 00:19:00 +0000 DXI Energy sees huge potential ahead as it gets green light for Woodrush exploration well, BC Wed, 06 Mar 2019 19:34:00 +0000 88 Energy confirms Winx-1 well reached total depth and hit multiple potential pay zones Wed, 06 Mar 2019 12:25:00 +0000 Jadestone Energy predicts significant production uplift in 2019 Wed, 06 Mar 2019 11:24:00 +0000 Victoria Oil & Gas reveals Kevin Foo will depart as it raises £12.6mln for “new beginning” Wed, 06 Mar 2019 08:15:00 +0000 Angus Energy sets out Balcombe plans Wed, 06 Mar 2019 08:09:00 +0000 FAR Ltd MD talks development of assets offshore West Africa and Western Australia Wed, 06 Mar 2019 01:55:00 +0000 FAR Ltd (ASX:FAR) managing director Cath Norman updates Proactive Investors on plans and activities offshore The Gambia following the Samo-1 well, and discusses the broader development of the SNE field.

Meanwhile, a seismic survey has recently been completed on the oil & gas explorer's asset offshore Western Australia, with results due in the second half of this year.

]]> DXI Energy takes step forward receiving permits to drill at Woodrush Oil Project Tue, 05 Mar 2019 19:00:00 +0000 DXI Energy Inc. (CVE:DXI-OTCQB:DXIEF) Chairman Bob Hodgkinson sat down with Steve Darling from Proactive Investors Vancouver to discuss the major step the company moves forward receiving the permits to drill at the Woodrush Oil Project in North East British Columbia.

Hodgkinson also told Proactive, the company has been granted the right to extend their capital raise to 2.4 million.

]]> Anfield Energy set for $2M raise to develop Charlie project Tue, 05 Mar 2019 17:16:00 +0000 TAG Oil says New Zealand asset sale to Malaysia company receives approval Tue, 05 Mar 2019 16:07:00 +0000 DXI Energy poised for drilling at Woodrush field after receiving permits Tue, 05 Mar 2019 15:15:00 +0000 Independent Oil & Gas jump as RockRose puts North Sea firm in takeover crosshairs Tue, 05 Mar 2019 13:03:00 +0000 Citigroup cuts United Utilities to ‘neutral’ from ‘buy’ after 12-month target price reached Tue, 05 Mar 2019 11:34:00 +0000 Good Energy buys stake in electric vehicle charge points app Tue, 05 Mar 2019 08:56:00 +0000 United Battery Metals looking in Vanadium in Colorado and Utah Mon, 04 Mar 2019 17:44:00 +0000 United Battery Metals Corp (CSE:UBM) (OTCBB:UBMCF) CEO Michael Dehn sat down with Proactive Investors at the Prospectors & Developers Association of Canada convention in Toronto.  The vanadium and uranium exploration company's property, called the Wray Mesa Project, can be accessed from either Colorado or Utah.

]]> Cobalt 27 Capital Corp sees Electric Vehicles as the key to their royalty model. Mon, 04 Mar 2019 16:52:00 +0000 Cobalt 27 Capital Corp (CVE:KBLT) (OTCMKTS:CBLLF) Chairman and CEO Anthony Milewski sat down with Proactive Investors at the Prospectors & Developers Association of Canada convention in Toronto. Cobalt 27 focuses on investing in an electric metals-focused portfolio of streams, royalties, and direct interests in mineral properties.

]]> Anfield Energy looking to advance Charlie project this year as it positions itself for market turnaround Mon, 04 Mar 2019 14:30:00 +0000 88 Energy sees encouragement in additional results from Winx-1 exploration well Mon, 04 Mar 2019 14:10:00 +0000 Mosman Oil and Gas updates on Stanley progress Mon, 04 Mar 2019 10:14:00 +0000 VSA CAPITAL MARKET MOVERS - Egdon Resources 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.




]]> Energean Oil and Gas reveals start of well drilling campaign offshore Israel Mon, 04 Mar 2019 09:04:00 +0000 Active Energy acquires North Carolina site to be Coalswitch hub Mon, 04 Mar 2019 08:10:00 +0000 Plexus Holdings highlights POS-GRIP rental deal with Gasprom Mon, 04 Mar 2019 08:05:00 +0000 Curzon Energy ready to move into action phase as new CEO looks forward Fri, 01 Mar 2019 14:14:00 +0000 Scott Kaintz, who took over as Curzon Energy Plc’s (LON:CZN) chief executive in November, explains the recent £95,000 fund raise will help it finalise terms of its farm-in to Pared Energy’s Texas gas assets.

The board and major shareholders backed the raise, he adds, which was at a near 22% premium to the market price.

Texas will give Curzon a second asset in the US alongside Coos Bay, where Kaintz says the plan is re-evaluate how best to access the gas ‘we know is there’.

Through Curzon, UK investors will have a way into the US natural gas story as the world de-carbonises and the potential for US LNG exports.

]]> VSA CAPITAL MARKET MOVERS - NuLegacy Gold Fri, 01 Mar 2019 10:12:00 +0000

NuLegacy Gold#: Go West!

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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.



]]> VSA CAPITAL MARKET MOVERS - Lake Resources 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.




]]> L2 Capital's Marcelo Lopez talks all things uranium Fri, 01 Mar 2019 04:46:00 +0000 Marcelo Lopez, managing partner & senior portfolio manager at L2 Capital, joins Proactive Investors' Danielle Doporto in the Sydney studio to discuss global uranium markets.

Lopez explains why he's bullish on the commodity, touching on new regulations and shifting demand and supply.

]]> Greencoat UK Wind delivers strong return buoyed by acquisitions Thu, 28 Feb 2019 12:28:00 +0000 Renewables group Greencoat UK Wind PLC (LON:UKW) delivered a strong financial performance and a chunky dividend despite electricity generation being slightly below budget. Acquisitions added a further three wind farms to the portfolio in the year just gone, taking it to 32 separate investments generating 2,003GWh of electricity (6% down on expectations). Greencoat's Stephen Lilley tells Proactive London what's in the further acquisition pipeline and what investors can expect in terms of newsflows over the next few months. Cash generation was on target at £117.3mln, allowing the company to pay a 6.76p a share dividend (representing a yield of just under 5%). The pay-out was 1.6-times covered by net profits and the plan is to declare a 6.94p divi for 2019. The company aims to match increases in the dividend to retail price inflation. Greencoat’s target return to investors is an IRR net of fees and expenses of 8-9%. The net asset value as at December 31 was 123.1p, up 11.8p from the same time last year.

]]> DGOC reports US$289.8mln of revenue as acquisitive growth continued through 2018 Thu, 28 Feb 2019 11:04:00 +0000 Diversified Gas & Oil PLC (LON:DGOC) revealed it generated some US$289.8mln of revenue during 2018 as it continued to expand its business through acquisitions. It completed four deals during the year, with US$938mln of transaction value. CEO Rusty Hutson tells Proactive London more about the company's strong results and updates us as to what's in the near-term pipeline. Proved reserves totalled 474mln barrels oil equivalent at the end of the year, with a value of US$1.6bn. Production averaged 41,000 barrels of oil equivalent per day, compared to 6,600 boepd in 2017, and, it measured an exit rate 70,000 boepd as at 31 December. DGOC strikes deals with Kentucky authorities. Earnings (adjusted EBITDA) was reported at US$161.9mln, up 910% from the US$16mln reported for last year. DGOC began its quarterly dividend payments, with the third quarter payment (3.30 US cents per share) due on 29 March and the fourth quarter payment (3.40 cents per share) will be due on 28 June. It will pay a total of 11.225 cents per share for the whole year. "These results reflect a year of rapid growth as the company continued to capitalise on opportunities in Appalachia to complete a number of material acquisitions consistent with our stated growth strategy,” said  Hutson.

]]> Europa Oil & Gas highlights Inishkea potential as farm-outs continue Wed, 27 Feb 2019 10:37:00 +0000 Europa Oil & Gas Holdings plc (LON:EOG) has highlighted a new prospect inventory for its priority exploration area in the Slyne Basin, off Ireland’s west coast. CEO Hugh Mackay tells Proactive London how the farm outs are progressing and what's been happening in the dataroom. The Inishkea gas targets however remain the company’s primary focus, and the new inventory confirms some 1.5 trillion cubic feet in prospective resources. Mackay also details that the prospects have a 1-in-3 chance of success and how a site survey is planned for this year which makes 2020 drilling possible, subject to funding and regulatory approval. .Farm out talks are ongoing with a major oil and gas company, “Since opening the farmout dataroom in December 2018 we have had several large oil companies review the prospect and we are updating them with this new information,” said Mackay. “Separately, our ongoing farm-in negotiations with a major international oil and gas company for three of our licences, FEL 1/17, FEL 3/13, and LO 16/20 which holds Inishkea are progressing well.

]]> Brookside Energy MD details platform for future reserve growth in Anadarko Basin Wed, 27 Feb 2019 04:21:00 +0000 Brookside Energy Ltd (ASX:BRK) managing director David Prentice visits Proactive's Perth satellite studio to recap the past twelve months of work the oil and gas E&P company has done as part of its land leasing and development strategy, and explain the platform for future growth that this has established.

Brookside is focused on the SWISH, SCOOP and STACK plays in the world-class Anadarko Basin in Oklahoma in the US.

]]> Plug Power CEO says fuels cells will soon dominate electric vehicles Tue, 26 Feb 2019 17:21:00 +0000 Plug Power Inc (NASDAQ:PLUG) CEO Andy Marsh tells Proactive Investors the fuel cell manufacturer, whose customers include Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT), says in the next five years, fuels cells will begin to dominate electric vehicles like forklifts, delivery vans, and other vehicles on the road for eight to 15 hours a day.

The Latham, New York company replaces lead acid batteries to power electric vehicles with hydrogen fuel cells. Marsh says investors should expect news flow from the company in the next six months indicating the company would be deploying vehicles on the road with some "good partners."

]]> G3 Exploration expects Green Dragon de-merger to take place in June Tue, 26 Feb 2019 11:42:00 +0000 G3 Exploration Ltd (LON:G3E) expects the spin-out of its producing gas assets in China to complete at the end of June. The producing assets have been consolidated into Green Dragon Gas, which will either be sold or listed in Hong Kong on 28 June. Chairman and CEO Randeep Grewal tells Proactive London why this is a seminal day for G3 and how investors have a 30 day window of opportunity to decide whether or not they take a position. Detail here too on how the money from any sale will be used in the first instance to pay off US$270mln of debt owing to G3E, which will enable it to clear US$150mln of Nordic bonds and convertible loans. The remaining US$120mln will fund G3's development of the Guizhou Block (GGZ), which is scheduled to start production this year. Grewal continues, "The approval of the Dividend in Specie, our third since 2006, is a landmark moment for G3 Exploration which will allow us to complete the planned separation of the producing assets from our exploration and development assets. “Crucially, it provides a mechanism for us to return the value created within the producing blocks - where over US$1.3 billion has been invested by us with our partners - to our shareholders.”

]]> Tlou Energy says it's "well positioned for significant advancements” Tue, 26 Feb 2019 11:33:00 +0000 Tlou Energy Ltd (LON:TLOU) CEO Tony Gilby quotes company financial results to highlight the significant achievements of 2018 and says it's in a good position to make “further advancements” in the coming months. Alongside him, speaking to Proactive London on the line from Botswana, is Executive Director Gabaake G. Gabaake who explains the company's latest RFP as well as the critical environmental approval process. News here too on how the company intends to work with local communities and 'give back' when possible.The results come as Tlou is advancing a well drilling and development programme at the Lesedi coal bed methane project, in Botswana. Earlier this week, Tlou told investors that it has begun production testing operations at Lesedi, following the completion of the Pod 3 infrastructure, and that it would now proceed with de-watering and the lowering of pressure in the coal seam in order to start gas flows.Also here an introduction to Tlou's new business-focussed president.

]]> Archer Exploration progressing technical & commercial development of IP in tandem Mon, 25 Feb 2019 23:42:00 +0000 Mohammad Choucair, CEO of Archer Exploration Ltd (ASX:AXE), tells Proactive Investors, "The Intellectual Property (IP) we're developing at Archer is our commercial gateway to long term revenue."

Archer last week lodged a provisional patent relating to graphene ink and its use in biosensors.

]]> Black Rock Mining's Mahenge Graphite Project has been granted mining permits Mon, 25 Feb 2019 23:27:00 +0000 Black Rock Mining Ltd (ASX:BKT) chief executive officer John de Vries tells Proactive Investors that the granting of two contiguous mining licenses for the Mahenge Graphite Mine in Tanzania represents, "A really important milestone... the end of the principal permitting stage of the project; and from now on [the company] just moves forward with detailed engineering work and financing."

Black Rock will be running a pilot plant in China in order to prove the flow sheet and the quality of the end product to potential offtakers.

"We're still confident that towards the end of 2020 we'll start seeing the first product of the world's best graphite concentrate hit the market," says de Vries.

]]> I3 Energy agrees terms of £24mln junior loan package for Liberator programme Mon, 25 Feb 2019 15:46:00 +0000 I3 Energy PLC (LON:I3E) has agreed on terms over a £24mln junior loan package to fund a three-well campaign on its Liberator field in the North Sea. Graham Heath and Majid Shafiq give Proactive London an update on today's news  as well as further detail on how their JV discussions are progressing. News here too on the drilling programme and what the next steps are operationally post-drilling as well as detail on what type of ineterste theyare seeing in the data room.

]]> Oil price, President, RockRose, Reabold/United, IOG And finally… 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

]]> VSA Morning Miner - Tectonic Gold 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. 

]]> VSA Daily Flow Test - Egdon Resources 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.



]]> Touchstone to target world class oil and gas reserves after fundraise Tue, 19 Feb 2019 11:30:00 +0000 Paul Baay, CEO of Touchstone Exploration (LON:TXP) tells Proactive London that its £3.8mln fundraise had the backing of the company's two biggest institutional shareholders. 

The capital injection will fund exploration at the Ortoire Block in Trinidad.  Baay explains the programme is a potential step change and the company is targeting "very large gas reserves and very large oil reserves."

He added, “If we have a great deal of success, we could have a multi-year drilling programme and that’s a problem I’m happy to deal with down the road.”

]]> Oil price, Sound, Eco Atlantic, Plexus, Pantheon, AAOG, AAA And finally… 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 …….

]]> Anglo African Oil & Gas gets cash boost as SNPC pays US$660,000 for recent drilling Mon, 18 Feb 2019 09:49:00 +0000 Anglo African Oil & Gas PLC (LON:AAOG) has received US$660,000 from SNPC, the Congolese state petroleum company, for a share of costs of the recent successful well at Tilapia. There is also a proposal to repay the outstanding US$9.5mln owed to Anglo African through a short-tem payment plan. Anglo's Executive Chairman David Sefton tells Proactive London how SNPC owns a 44% stake in the field and Anglo African 56%. Following the success of the TLP-103C well Anglo wants to start production in April from the upper reservoirs at Tiilapia at up to 1,500 barrels of oil per day. The money it has already received from SNPC and any future payments will fund that programme says Sefton. He said it had offered SNPC the opportunity to reduce its stake in the field in lieu of the money owing, but the Congolese company chose to pay cash instead.

]]> VSA CAPITAL MARKET MOVERS - Tectonic Gold 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.



]]> Carnarvon Petroleum advancing Dorado and Buffalo projects Mon, 18 Feb 2019 01:57:00 +0000 Carnarvon Petroleum Ltd (ASX:CVN) managing director Adrian Cook speaks to Proactive Investors following a successful $50 million capital raising last week.

Cook discusses the Dorado project, detailing the company's plans and expectations for three wells. He also updates on the Buffalo Project.

]]> Oil price, President, Coro, IGas, Genel, And finally… 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


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?


]]> DXI Energy improves balance sheet to focus on developing oil and gas assets Fri, 15 Feb 2019 11:53:00 +0000 DXI Energy (CVE:DXI-OTCQB:DXIEF) Chairman Robert Hodgkinson sat down with Steve Darling from Proactive Vancouver with news about some changes on the balance sheet to strengthen the company.

Hodgkinson telling Proactive the work he and new President and CEO Sean Sullivan have done will allow them to focus on developing their assets in the U.S., Alberta and British Columbia. 

]]> Enteq Upstream expands into the Middle East 'now lean years are over'. Thu, 14 Feb 2019 16:22:00 +0000 Enteq Upstream PLC (LON:NTQ) Martin Perry talks Proactive London through both the company's genesis and the expertise he brings to the management team as CEO. Enteq Upstream focusses on acquiring and consolidating companies providing specialist products and technologies to the upstream oil and gas services market. Here Perry gives detail on Enteq's geographical focus spreading from mainly North America out to the Middle East where Saudi Arabia is now very much part of the company's growth strategy. Perry says he fully expects customer demand to grow 'now the lean years are over' and he explains how Enteq's investment in technology keeps them, in his view, one step ahead of the competition.

]]> VSA Morning Miner - Bacanora Lithium 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.




]]> Oil price, Coro, Solo, Genel, Range, Tower And finally… 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.

]]> VSA Morning Miner - Tectonic Gold 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.




]]> Mosman Oil And Gas director shares 2019 outlook for US and Australian assets Mon, 11 Feb 2019 07:30:00 +0000 Mosman Oil And Gas (LON:MNMN) technical director Andy Carroll provides Proactive Investors with production updates and discusses the company's increased stake in the Challenger Project, which is in located in East Texas, USA.

Carroll also talks about the outlook for 2019 with regards to assets across the USA as well as in Australia.

]]> Daily Blog: Oil price, Aminex, Zenith Energy, SDX Energy, Genel, United/Prospex... 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 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 


]]> High Peak Royalties cashing in on US acquisition, with Australian assets developing Fri, 08 Feb 2019 01:37:00 +0000 High Peak Royalties Ltd (ASX:HPR) chairman Andrew Carroll summarises for Proactive Investors the major achievements of 2018, centred around newly-acquired Planet Gas USA, which is already contributing to the bottom line with cash receipts from royalties of $137,782 for the December 2018 quarter.

Carroll also describes opportunities arising from Australia assets that are under development in Queensland and the Northern Territory.

]]> Amerisur Resources details 2019 work programme as it spuds third CPO-5 well Thu, 07 Feb 2019 15:03:00 +0000 John Wardle, chief executive of Amerisur Resources plc (LON:AMER), chats to Proactive London's Andrew Scott after announcing the spudding of Calao-1X - an exploration well on the CPO-5 block.

The company's planned 2019 drill programme will include four wells at Indico, up to six wells at the Coendu area and the Miraparriba-1 well.

Group production in the fourth quarter of 2018 amounted to 4,602 bopd, with the ‘peak’ daily rate reached 5,405 bopd and the current rate was 5,426 bopd.

]]> Aminex raises $2.4mln 'to drive operations' and advance Kiliwani gas project Thu, 07 Feb 2019 12:22:00 +0000 Aminex PLC (LON:AEX) CEO Jay Bhattacherjee tells Proactive London they're intending to pick up the pace of its development of the Kiliwani gas project following a new equity funding which brought in close to $2.4mln.

He says they're aiming to take advantage of depressed market conditions in the oil and gas services industry and expect to bring forward production growth from Kiliwani North as a result of the investment.

Bhattacherjee adds that the capital injection will cover the reprocessing of existing seismic data, the acquisition of new seismic and to support the transition of the Kiliwani South exploration prospect into a ‘drill-ready’ target.

]]> Angus Energy’s Brockham test delivers a lot less than hoped for Mon, 04 Feb 2019 13:52:00 +0000 Flow test results from Angus Energy Plc’s (LON:ANGS) latest well at Brockham in Surrey were underwhelming, says independent analyst Barney Gray.

Once again a test of the deep lying Kimmeridge clay produced water, which is not what was hoped for, he told Proactive.

Angus tested a large section at 95m and there was a little bit of good quality light oil but as yet none of the developers have been able to generate sustained oil flow, Gray says.

“What we are seeing is big flow rates for small periods but no one has really got on top of it technically.

“The positives are that there is oil there and a lot of it, but we are running out of wells to drill.”

]]> VSA CAPITAL MARKET MOVERS - Anglo African Agriculture 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

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]]> VSA Morning Miner - Shefa Yamim 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.     

]]> President, Range, Genel 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.

]]> VSA Capital Market Movers - DekelOil Public#: Q4 Production Update & Cashew Acquisition 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.

]]> Tlou Energy expects completion of drilling at Lesedi CBM project 'within weeks' Wed, 30 Jan 2019 11:57:00 +0000 Tony Gilby, managing director of Tlou Energy Ltd (LON:TLOU), tells Proactive London's Andrew Scott excellent progress has so far been made with the drilling operation at its Botswana coal bed methane (CBM) project.

Gilby also recaps on achievements in its latest quarter - which saw an environmental impact assessment (EIA) for the downstream operations attached to the CBM project submitted as well as the lodging of its re-tender to the Botswana government for the proposed CBM fuelled pilot power plant.

The recently launched pilot well drilling campaign will, subject to positive results, create the basis for the initial gas-to-power project.

]]> Oil price, Ophir, Anglo African And finally… 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.

]]> Hexagon Resources MD discusses quarterly results, and busy quarter ahead Wed, 30 Jan 2019 04:48:00 +0000 Hexagon Resources Ltd (ASX:HXG) managing director Mike Rosenstreich takes Proactive Investors through the key outcomes of the company's quarterly report.

Rosenstreich speaks about near-term activities in upstream as well as downstream operations, also discussing the strategic approach surrounding offtake agreements for the McIntosh Graphite Project, located in Western Australia’s East Kimberley.

]]> Europa O&G's Hugh Mackay on Wressle progress and 2019 work programme Tue, 29 Jan 2019 13:03:00 +0000 Hugh Mackay, chief executive of Europa Oil & Gas Holdings plc (LON:EOG), discusses with Proactive's Andrew Scott the granting of a one year extension to Wressle's existing planning approvals.

The award extends access to the project until 24 January 2020

It means that Europa and its partners have sufficient time to reach a determination in its appeal against planning refusals for the proposed oil field development at Wressle.

Mackay also talks through their 2019 work programme plans as well as offers up a few more details on the Morocco deal which he says they're close to finalising.

]]> Block Energy 'days away' from start of major horizontal side-track at West Rustavi Tue, 29 Jan 2019 12:54:00 +0000 Paul Haywood, director of Block Energy Plc (LON:BLOE), updates Proactive London's Andrew Scott on the sidetrack operations at the West Rustavi field, in the existing 16a wellbore.

It's the first of an initial two well programme there as Block aims to increase production up to 650 barrels of oil per day by the end of the first half.

The drilling follows a successful oil test in December which confirmed it is in an active hydrocarbon system, and, the previously producing reservoir retains reserves and is still pressurised.

Haywood describes the sidetrack as a “high impact well” for the company.

]]> Hillcrest Petroleum signs MOU with Australian Oil and Gas company Xstate Mon, 28 Jan 2019 18:56:00 +0000 Hillcrest Petroleum (CVE:HRH) CEO Don Currie sat down with Steve Darling from Proactive Investors Vancouver to share details of their new memorandum of understanding with Xstate Resources.

Xstate is a publicly listed Australian oil and gas company and now with Hillcrest will jointly pursue oil and gas acquisitions in Canada and the United States.  

]]> COPL enjoying renewed confidence in its Nigeria project as financing talks advance Mon, 28 Jan 2019 15:55:00 +0000 Arthur Millholland, chief executive of Canadian Overseas Petroleum Limited (LON:COPL) tells Proactive London's Andrew Scott he hopes to complete financing for an appraisal drilling programme at OPL226 in Nigeria by the middle of 2019.

He adds that talks are underway with three large groups that can provide both oil services and finance.

COPL's looking to arrange project finance of US$100mln and equity of a further US$20mln

]]> SDX Energy's Paul Welch on operational plans ahead of 'landmark' 2019 Mon, 28 Jan 2019 12:50:00 +0000 Paul Welch, chief executive of SDX Energy Inc (LON:SDX) (CVE:SDX), talks through the operational plans for its various projects across Egypt and Morocco for the year ahead.

In Egypt, he says a 10 well workover programme is set to begin at North West Gemsa and further drilling opportunities at Meseda means they're expecting to grow gross production from the asset in 2019.

Meanwhile in Morocco Welch says they're looking forward to starting the 12 well drilling campaign in the second half of the year.

He also discusses the decision to delist from Toronto’s TSX Venture Exchange and move its corporate residence to the UK from Canada.

]]> Small-Cap Snapshot: PG&E shares slump after struggling utility fails to turn corner after wildfires Fri, 25 Jan 2019 19:51:00 +0000 Small cap names making headlines today are: PG&E Corporation (NYSE:PCG), NextEra Energy (NYSE:NEE), OSI Systems (NASDAQ:OSIS), Moog Inc (NYSE:MOG.A). 

]]> Union Jack Oil welcomes one-year planning extension for Wressle Fri, 25 Jan 2019 11:15:00 +0000 David Bramhill, chairman of Union Jack Oil PLC (LON:UJO), discusses with Proactive London's Andrew Scott a one year extension to existing planning approvals which has been granted to the Wressle project.

The award extends access to the project until 24 January 2020.

It means the JV partners have sufficient time to reach a determination in its appeal against planning refusals for the proposed oil field development at Wressle.

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources 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.




]]> Bass Oil working to add Tier 1 and Tier 2 oil producing assets in Indonesia Thu, 24 Jan 2019 22:39:00 +0000 Bass Oil Ltd (ASX:BAS) managing director Tino Guglielmo updates Proactive Investors following a quarterly report revealing that oil production for the December quarter rose by 83%.

Guglielmo explains that the company is driving forwards its Indonesia-focused strategy, developing its existing onshore Tangai-Sukananti JV asset whilst seeking new Tier 1 and Tier 2 assets to add to its portfolio.

]]> Savannah, Premier 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.


]]> VSA CAPITAL MARKET MOVERS - Central Asia Metals Thu, 24 Jan 2019 11:40:00 +0000

Central Asia Metals#: Q4 2018 Operations Update

For the full report, please click here. 

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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.


]]> Oil price, Genel, IGas, Block, Zenith, Petro Matad And finally… Wed, 23 Jan 2019 12:38:00 +0000 Oil price, Genel, IGas, Block, Zenith, Petro Matad And finally…



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

Oil price

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

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

Genel Energy

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

IGas Energy

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

Block Energy

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

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

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

Zenith Energy

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

Petro Matad

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

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

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

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

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

And finally…

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

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


]]> Quadrise offers clarity on what investors can expect for 2019 Wed, 23 Jan 2019 08:36:00 +0000 Quadrise Fuels International PLC (LON:QFI) talks to Proactive Investors London about the new opportunities for business as the company puts a 'challenging year' behind them.

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

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

]]> Gold Road Resources 'coming to closing phases of construction' on Gruyere Gold Mine Wed, 23 Jan 2019 01:32:00 +0000 Gold Road Resources Ltd (ASX:GOR) managing director Duncan Gibbs updates Proactive Investors on development of the Gruyere Gold Mine in Western Australia, and exploration works in the wider Yamarna Greenstone belt.

Gibbs says, "There have been very few discoveries at the scale of Gruyere globally, and more so in Australia [where] you've got Gruyere and Tropicana of a similar magnitude discovered this century."

A project update is due out in the coming weeks.

]]> Amerisur, Cairn Tue, 22 Jan 2019 14:14:00 +0000 Amerisur, Cairn



Amerisur Resources

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

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

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

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

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

Cairn Energy

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

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

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

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


]]> VSA CAPITAL MARKET MOVERS - Egdon Resources 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.




]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt 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.     




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

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

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

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

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

]]> Oil price, Hurricane, Genel, VOG, Falcon, Empyrean And finally... Mon, 21 Jan 2019 15:02:00 +0000 Oil price, Hurricane, Genel, VOG, Falcon, Empyrean And finally…



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

Oil price

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

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

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

Hurricane Energy

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

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


Genel Energy

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

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

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

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

Victoria Oil & Gas

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

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

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

Falcon Oil & Gas

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

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

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

Empyrean Energy

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

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

And finally…

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

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


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

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

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

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

]]> Falcon Oil & Gas Ltd back to drilling and 'full steam ahead' as rig contract signed Mon, 21 Jan 2019 10:37:00 +0000 Philip O’Quigley, chief executive of Falcon Oil & Gas Ltd (LON:FOG), tells Proactive London's Andrew Scott a rig contract's been signed for the Stage 2 work programme that will advance its potentially world class shale project in Australia.

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

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

]]> Whitebark Energy targeting commercial oil production from Wizard Lake in Q2 this year Mon, 21 Jan 2019 03:56:00 +0000 Whitebark Energy (ASX:WBE) managing director David Messina speaks to Proactive Investors about the confirmed commercial oil discovery at the Wizard Lake project in Canada, which the oil & gas explorer & producer holds a 30% stake in under the Point Loma Joint Venture (PLJV).

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

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

]]> Daily Blog: Oil price, Anglo African Oil & Gas And finally... Fri, 18 Jan 2019 11:27:00 +0000 Oil price, Anglo African Oil & Gas And finally…



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

Oil price

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

Anglo African Oil and Gas

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

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

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

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

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

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

And finally…

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

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

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


]]> AFC Energy successfully tests world first hydrogen electric vehicle charger Fri, 18 Jan 2019 08:51:00 +0000 AFC Energy PLC's (LON:AFC) Adam Bond spoke to Proactive London's Andrew Scott after announcing they'd successfully demonstrated the world’s first electric vehicle charger based on hydrogen fuel-cell technology.

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

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

]]> Brookside Energy focused on increasing landholding and reserves amid global hydrocarbon growth Thu, 17 Jan 2019 22:38:00 +0000 Brookside Energy Ltd (ASX:BRK) managing director David Prentice speaks to Proactive Investors about the company’s oil assets in the Anadarko basin and the impact of markets on its business model.

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

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

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

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

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

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

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

]]> Jersey Oil & Gas, President Energy Thu, 17 Jan 2019 10:50:00 +0000 Jersey Oil & Gas, President Energy



Jersey Oil & Gas

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

President Energy

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

Core Finance CEO interview: Peter Levine of President Energy

Voxmarkets Podcast

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

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

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


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

VSA Morning Miner, 17/01/19

Click here for PDF version

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


Lake Resources (ASX:LKE

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

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

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

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




]]> Base Resources' MD updates on quarterly highlights, production, and projects Thu, 17 Jan 2019 08:15:00 +0000 Base Resources Limited (ASX:BSE, LON:BSE) managing director Tim Carstens speaks to Proactive Investors about the key outtakes from the quarterly update for Q4 2018, released today.

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

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

]]> Anglo African O&G's David Sefton updates on drilling & 'game-changing' Mengo reservoir Wed, 16 Jan 2019 15:34:00 +0000 David Sefton, executive chairman of Anglo African Oil & Gas PLC (LON:AAOG), dropped into the Proactive London studio to update on the drilling of well TLP-103C at their Tilapia field in the Republic of the Congo.

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

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

]]> Oil price, Reabold, Eco Atlantic, Ophir, Touchstone And finally… Wed, 16 Jan 2019 11:38:00 +0000 Oil price, Reabold, Eco Atlantic, Ophir, Touchstone And finally…



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


Oil price

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

Reabold Resources/Upland Resources

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

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

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


Eco Atlantic Oil & Gas

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


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

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


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

And finally…

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


]]> Petro Matad Ltd's Mike Buck details fully funded 2019 drill programme Wed, 16 Jan 2019 09:13:00 +0000 Mike Buck, chief executive of Petro Matad Ltd (LON:MATD), discusses with Proactive London's Andrew Scott the new targets for this year’s campaign in Mongolia.

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

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

]]> Touchstone Exploration looking forward to 'true exploration drilling' in Trinidad Tue, 15 Jan 2019 12:41:00 +0000 Paul Baay, president and chief executive of Touchstone Exploration Inc (LON:TXP, CVE:TXP), caught up with Proactive London's Andrew Scott to discuss what's been a positive start to 2019, in terms of production as well as highlighting plans for further well drilling operations.

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

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

]]> Daily Blog: Oil price, SDX, Ophir, Premier, Rose Petroleum And finally... Mon, 14 Jan 2019 13:44:00 +0000 Oil price, SDX, Ophir, Premier, Rose Petroleum And finally…



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

Oil price

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

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

SDX Energy

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

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

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

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

Ophir Energy

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

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

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

Premier Oil

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

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

Rose Petroleum- Erratum

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


And finally…

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

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


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

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

]]> Zenith Energy CEO confident of achieving production targets ahead of drill campaign Mon, 14 Jan 2019 09:48:00 +0000 Andrea Cattaneo, CEO of Zenith Energy Ltd (LON:ZEN), spoke to Proactive London's Andrew Scott ahead of the start of the company's 2019 workover and drilling activities.

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

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

VSA Morning Miner, 14/01/19

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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.




]]> Permex Petroleum announces non-brokered private placement financing to raise 1.5M Fri, 11 Jan 2019 18:27:00 +0000 Permex Petroleaum (CSE:OIL) CEO Mehran Ehsan joined Steve Darling from Proactive Investors Vancouver to discuss Permex's fund raise of 1.5 million in a non-brokered private placement.

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

]]> i3 Energy team discuss multi-well drill campaign and development plans for 2019 Fri, 11 Jan 2019 13:23:00 +0000 i3 Energy plc's (LON:i3E) CEO Majid Shafiq and CFO Graham Heath discuss with Proactive London's Andrew Scott a letter of intent that's been signed for a multi-well drill programme that’s intended to take the Liberator field to the cusp of production.

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

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

]]> Rose Petroleum expands footprint in Paradox Basin with further 'high quality acreage' Fri, 11 Jan 2019 09:51:00 +0000 Matt Idiens, chief executive of Rose Petroleum PLC (LON:ROSE), tells Proactive London's Andrew Scott they've expanded their footprint In the Paradox basin, in Utah, with a deal to acquire around 1,920 acres.

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

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

]]> Australian Vanadium's MD discusses plans for Gabanintha project with cash just raised Thu, 10 Jan 2019 23:00:00 +0000 Australian Vanadium Ltd (ASX:AVL) managing director Vincent Algar tells Proactive Investors that the company is well-funded to completes its definitive feasibility study (DFS) on the Gabanintha Vanadium Project in Western Australia, now that it has secured $6.16 million from an option conversion.

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

]]> Daily Blog: Oil price, Premier, PetroMatad, Angus, Aminex And finally... Thu, 10 Jan 2019 14:57:00 +0000 Oil price, Premier, PetroMatad, Angus, Aminex And finally…



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

Oil price

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

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

Premier Oil

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

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

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

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

Petro Matad

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

Angus Energy- You couldn’t make it up…

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

Aminex- Adding some beef…

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

And finally…

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


]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt 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.




]]> VSA CAPITAL MARKET MOVERS - DekelOil Public Limited 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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]]> 'It's the year we've been waiting for' - Columbus Energy's Leo Koot on 2019 Wed, 09 Jan 2019 15:15:00 +0000 Leo Koot, chairman of Columbus Energy Resources PLC (LON:CERP), tells Proactive London's Andrew Scott the company achieved its targeted end of year peak production rate of 1,000 barrels of oil per day.

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

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

]]> VSA CAPITAL MARKET MOVERS - Central Asia Metals 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.



]]> VSA CAPITAL MARKET MOVERS - Colombus Energy Resources 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.




]]> Oil price, Independent Oil & Gas, Zenith Energy And finally… Tue, 08 Jan 2019 14:08:00 +0000 WTI $48.52 +56c, Brent $57.33 +27c, Diff -$8.81 -29c, NG $2.94 -10c

Oil price

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

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

Independent Oil & Gas

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

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

Zenith Energy

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

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

And finally…

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

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

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

]]> VSA CAPITAL MARKET MOVERS - Egdon Resources 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.



]]> Anglo African Oil & Gas confirms multiple discoveries in TLP-103 well Mon, 07 Jan 2019 16:02:00 +0000 Anglo African Oil & Gas PLC (LON:AAOG) gives investors more detail on the Schlumberger wireline logging of the recently drilled TLP-103C well in the Republic of Congo. Executive Chairman David Sefton could barely disguise his excitement as he hot-footed it to the Proactive Investors London studio to give more details on the recent RNS. News here too updating investors on oil flow rates and what to expect in 2019. Logging has measured a total of 44 metres of oil column – with 26 metres in the Mengo reservoir (primary target), 13 metres in newly found horizons between the R3 and the Mengo, and, 5 metres in the R2 reservoir. Djeno drilling is already underway and will become the primary focus leaving Mengo far behind as, according to Sefton, "There's only so much oil we can handle!".

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

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

VSA Morning Miner, 07/01/19

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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.




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

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

VSA Morning Miner, 04/01/19

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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.




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

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

VSA Morning Agri Comment, 21/12/18

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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.


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]]> VSA CAPITAL MARKET MOVERS - Tectonic Gold 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.



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

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

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

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

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

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

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

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

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

VSA Morning Miner, 18/12/18

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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.





]]> VSA CAPITAL MARKET MOVERS - Egdon Resources 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.




]]> VSA CAPITAL MARKET MOVERS - redT energy 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.

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

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

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

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

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

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

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

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

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

Bacanora Lithium#: Back Sonora; Convinced by Site Visit

For the full report, please click here. 

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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.



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

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

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

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

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

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

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

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

VSA Morning Miner, 10/12/18

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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.





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

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

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

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

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

VSA Morning Flow Test, 07/12/18

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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.



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

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

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

redT energy#: Valuation Update

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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.



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Reabold Resources

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

Diversified Gas & Oil

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

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


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

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

And finally…

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

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

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

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

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

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

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

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

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

We reiterate our Speculative Buy recommendation.

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

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

Independent Oil & Gas - LON:IOG

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

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

Eco Atlantic -LON:ECO

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

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

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

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

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

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

]]> VSA CAPITAL MARKET MOVERS - M2 Cobalt & Lake Resources. 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.



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

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

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

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

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

]]> VSA CAPITAL MARKET MOVERS - Tectonic Gold 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.  




]]> VSA CAPITAL MARKET MOVERS - redT energy 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)


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]]> VSA CAPITAL MARKET MOVERS - DekelOil 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.

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

Oil price

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

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

Empyrean Energy

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

And finally…

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

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

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

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

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

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

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

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

Sound Energy

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

Echo Energy

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

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

Zenith Energy

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

Faroe Petroleum/ Cairn Energy

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

Premier Oil

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

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

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

Wentworth Resources

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

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

Enteq Upstream

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


And finally…

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

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

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


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

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

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

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

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

We re-iterate our SPEC BUY recommendation.

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

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

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

VSA Comment

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

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

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

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

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

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


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

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

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

Faroe Petroleum

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

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

Jersey Oil & Gas 

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

And finally…

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

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

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

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

President Energy

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

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

Hurricane Energy

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

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

Reabold Resources/Upland Resources/United Oil & Gas

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

Providence Resources

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

Velocys- Changing the guard…

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


Here is the link to yesterday’s VoxMarkets podcast.

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

And finally…

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

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


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

Acquisition and Fundraise 

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

Q3 2018 Update; Focus on Profitable Barrels

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

Steeldrum Completed

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

Recommendation and Target Price


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

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

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

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

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

VSA Comment

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

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

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

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

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

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

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

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


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

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

We reiterate our Speculative Buy recommendation.  

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


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

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

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

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

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

We reiterate our Speculative Buy recommendation. 

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

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

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

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

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

We reiterate our Speculative Buy recommendation.

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

Egdon Resources#: FY 2018 Results

For the full report, please click here. 

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

Financial Performance

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

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

Key Catalysts in FY 2019

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

Developments for UK Shale

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

Recommendation and Target Price

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

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

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

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

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

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

VSA Comment

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

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

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

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

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


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

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

We reiterate our Speculative Buy recommendation. 

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

Range Resources 

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

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

Oil price

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

Far Limited

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

RockRose Energy

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

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

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

Petro Matad

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

And finally…

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

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

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

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

Oil price

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

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

President Energy

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

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


Echo Energy

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

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

Victoria Oil & Gas

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

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

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

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

Zenith Energy

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

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

And finally…

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

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

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

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

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

VSA Morning Miner, 22/10/18

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Lake Resources (ASX:LKE)

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

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


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

VSA Morning Miner, 22/10/18

Click here for PDF version

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


Lake Resources (ASX:LKE)

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

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


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

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

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

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

Far Ltd

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

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

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

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

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

VSA Morning Miner, 18/10/18

Click here for PDF version

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M2 Cobalt (CVE:MC)

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

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

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

We reiterate our Speculative Buy recommendation.



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

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


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

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

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

Amerisur Resources (LON:AMER)

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

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

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

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

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

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

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

We reiterate our Speculative Buy recommendation.

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

Oil price

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

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

Sound Energy

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

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


Two links today, my Voxmarkets Podcast from yesterday…

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

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

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

LSE Investor evening.

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

And finally…

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

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

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

Oil price

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

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

Hurricane Energy

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

Echo Energy

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

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

Zenith Energy

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

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

President Energy

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

Columbus Energy Resources

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

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


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

Master Investor magazine article: “Black Gold Shines Again”

And finally…

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

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

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

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

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

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

VSA Comment

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

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

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

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

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

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

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

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

Robust Output at Sasa

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

Shares Rallying Post Interims

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

Recommendation and Target Price


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

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

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


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

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

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

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

We reiterate our Speculative Buy recommendation.

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

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

Sasa Integration Driving Strong Returns

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

Low Cost Base Protects Against Metals Volatility

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

Recommendation and Target Price


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

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

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

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

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

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

We reiterate our Speculative Buy recommendation.

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


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

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

Mr. Naik is also the Chairman of the Board, Audit and Compensation Committees of Fortune Minerals Limited, a TSX listed company focused on the NICO cobaltgoldbismuthcopper Project in the North West Territories. As Chairman of Fortune, Mr. Naik has been actively involved in helping to raise in excess of C$100 million for Fortune and in the negotiation of several joint ventures. Mr. Naik is also a Director of Goldmoney Inc, a TSX listed precious metals financial services company and is involved in number of non-profit organizations including the Indus Entrepreneurs and Trillium Hospital Foundation.

We reiterate our Speculative Buy recommendation.

]]> VSA CAPITAL MARKET MOVERS - Novo Lítio Mon, 17 Sep 2018 10:38:00 +0100

Novo Lítio#: Gold Project Acquisition


Acquisition of Highly Prospective Gold Project

Novo Lítio (ASX:NLI) has agreed to acquire two granted licenses and one license application in northern Côte d’Ivoire, from Apollo Consolidated (AOP AU) who have decided to focus their efforts on their Australian gold and nickel sulphide assets. With a strong cash position of A$16m NLI is well placed to advance exploration and has committed to a A$5m initial exploration programme.

Within the 830km2 license areas, which have largely not been explored, three major gold-in-soil anomalies have been identified within the highly prospective Birimian greenstone trends which host the world class Tongon (Randgold Resources) and Syama (Resolute Mining) mines. Limited RC drilling has been carried out although notable results include 17m at 22.52g/t Au from 8m whilst aircore drilling at two of the three anomalies has yielded consistent grades of 2-5g/t Au at shallow depths.

NLI intend to issue 90m shares to complete the acquisition (this requires approval from shareholders at a meeting scheduled for September 28 2018) implying a valuation of A$4.6m (100%) using A$0.041/sh. at the time of announcement.

Sepeda Update

NLI continues to reserve its legal rights in relation to the Sepeda Lithium Project in Portugal. The company has engaged a new legal firm in Portugal; Coelho Ribeiro & Associados, to advise it on the dispute going forward. If NLI is unable to reach a commercial settlement it intends to pursue its rights in the Portuguese courts. No further exploration work has been carried out on the company’s lithium assets in Sweden.


Although this marks a significant change of direction from the lithium strategy these assets are highly attractive, in our view, with significant exploration potential and located in a highly prospective region. We believe the terms of the acquisition are attractive offering NLI shareholders exposure to attractive gold assets while providing AOP shareholders with continued exposure to future upside potential.   

We reiterate our Speculative Buy recommendation although withdraw our target price based on the lithium assets given the planned acquisition.