Headlines
• In Brief:
o Amerisur Resources (LON:AMER – 25p) – 2017 Continues the Trend
o JKX Oil and Gas (LON:JKX – 20p) – Operational Update Points Towards a Rejuvenated Business
o Soco International (LON:SIA – 141p) – Declaration of Intent
In Brief
• Amerisur Resources (LON:AMER – 25p) – 2017 Continues the Trend: Today's news of an analysts’ visit, while not newsworthy in and of itself, the disclosure of the 2017 outlook underlines the continuation of the 2016 programme. With an average production rate of up to ~8.5m bpd touted, the exit rate is likely to be significantly above that, and depending on the timing of that production, in excess of ~10.0m bpd. We believe this should buoy the shares, which will be added to by the post visit uplift on the sell side.
• JKX Oil and Gas (LON:JKX – 20p) – Operational Update Points Towards a Rejuvenated Business: Today's update, in which the new FDP has resulted in a 33% uplift in 2P Reserves. This positive development is added to by the fact that the Company is tackling its debt pile, and rather than using shares, which would dilute the equity holders further, it is repurchasing the bonds using cash. While the repurchase thus far is small, $2.2mm disclosed in this announcement, the fact that the management are looking at this approach at all is a testament to the fact that there is sufficient cash resource for it to do so, a statement of confidence in the future and a reflection of the fact that Management appear to be taking shareholder value seriously. All in all, today's update should please the Company's investors, and after what has been a period of instability, there finally appears to be some go od news for the equity holders and, more importantly, a positive outlook plotted for the future.
• Soco International (LON:SIA – 141p) – Declaration of Intent: Today's declaration of a 2p dividend while not a significant amount of money (in the wider scheme of things) or in yield, it does represent a sea change for the Company in that against this backdrop the Company is sufficiently confident in its current and future position to effectively put it beyond its use corporately. We believe that this underlines the current state of the business, and apart from the value creation in the share’s value, also offers equity holders opportunity to recoup their investment further. In this respect, investors should be pleased with the Company's officers and the declaration that they have made about the health of their investment.