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Today's Oil and Gas Update - Curzon Energy, Europa Oil & Gas, Chariot Oil & Gas

Published: 10:45 13 Dec 2017 GMT

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Headlines
• In Brief:
Curzon Energy (LON:CZN, – 8p) – $32.5mm (37p) – Pudding Ahead
Europa Oil & Gas (LON:EOG, – 6p) – Solid Update
Chariot Oil & Gas (LON:CHAR – 14p) – The Wait is Over

In Brief
Curzon (LON:CZN, – 8p) – $32.5mm (37p) – Pudding Ahead: Today’s announcement is a promising sign in the route towards narrowing down which of the Company’s type curves the is most representative of the performance of the Coos Bay assets. Once the wells are connected to the water and gas handling networks, we would expect the wells to undergo an intensive dewatering programme to elucidate not only the respective wells’ performance but the potential of the wider Coaledo formation, which is potentially productive over the significant majority (~75% - SPA estimates) of the Company’s acreage. This news does not affect our valuation estimate, which remains $32.5mm (37p).
Europa Oil & Gas (LON:EOG, – 6p) – Solid Update: Today’s update is solid reportage of the work that the Company has completed on its Licensing Option 16/20 in the Slyne basin, and is as informative an announcement as we have seen in a long time. While the quality of the announcement doesn’t in any way improve the risks associated with the prospect, what it does do is underline the fact that Management has completed the work and understand (as far as is possible ahead of drilling), the risks associated with the prospect inventory. This also provides some measure of comfort that the Company has been sanguine on its approach to the assessment of the risks. We believe that this approach will also ultimately mean Management is in the right frame of mind when it comes to farmins, which will inevitably be required to drill the prospects that have been identified.
Chariot Oil & Gas (LON:CHAR, – 14p) – The Wait is Over: after what will eventually be an 18 month (well flagged) hiatus, to our mind today’s announcement fires the starting pistol on what will be as an active 18 month forward period as the preceding 18 month period was quiet. We said over 12 months ago that save for sporadic corporate initiatives, that investors could deemphasise their monitoring of the Company until such times as the restart of the programme approaches, whereupon the interest and activity will naturally provide impetus to the share price. This time has arrived, and we believe that the pending work programme, which will include a number of high impact wells, while carrying risks, also has the potential to be transformational. In our opinion, the current valuation is undemanding, and doesn’t reflect the option value inherent with valuations of the exploration projects. We think now is the time to dust down the investment file on the Company and think about selective investment.

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