Fox-Davies Capital Thursday Energy and Mining News Wrap
JKX Oil & Gas (JKX) published its interim management statement for 3rd quarter 2008. Main highlights include a potential delay in sales gas delivery in Russia from H1 2009 to 2010. Exploration activities in Ukraine and Hungary remains on track with three wells to be drilled in Q4 2008. High impact fracture programme at Rudenskoye in Ukraine are all expected in Q4.
Comments: The delays in gas sales in Russia may not be received well by the market. We however note that JKX is trading at about half our estimation of core NAV. Given the company is already generating cash (existing production) and well funded, we believe that any further weakness in the share associated with this release could be a god entry point in the stock.
Gas matters reports that Argentina will give tax breaks to oil companies that increase their output, and to refiners that expand facilities or build new ones, the planning minister said today.
Comments: Independent operators in Argentina include Antrim and Geopark.
Volga Gas (VGAS, 87.5p,▲ (3.55%)) announced yesterday that Kulyaev, Alexander Alekseevich has cancelled all proceedings filed against Volga Gas' 100% wholly-owned subsidiary Woodhurst Holdings and Trans Nafta. Volga Gas has also ceased its arbitration proceedings in London following news of the cancellation of the lawsuit. Following the cessation of all proceedings, Volga Gas expects that production at Vostochny-Makarovskoye will be able to come on stream in 1H 2009.
Comments: this is the third positive sign posts that Russia is accommodating private investors: 1. Resolution of TNK-BP ownership battle, 2. Regulatory approval of the ONGC/Imperial deal, 3. And now uncertainty on Volga licences removed. Certainly positive for investors sentiment vis a vis Russia.
Premier Oil (PMO, 725.5p,▼ (3.65 %))indicates that in the current environment, they are well placed to pursue acquisition opportunities.
Stratic Energy (SE) announces that it has been awarded three blocks in the U.K. 25th Offshore Licensing Round. The Licences awarded to Stratic include blocks 42/10 and 42/15 in the Southern Gas Basin adjacent to the Breagh gas discovery and part block 20/15 in the Central North Sea. Stratic will have a 20% interest in blocks 42/10 and 42/15 operated by Sterling Resources. The blocks are located approximately 20km from the Breagh discovery, in which Stratic has a 10% interest, and where the partnership is currently preparing to spud the second of two appraisal wells to be drilled this year. In the Central North Sea, Stratic will have 100% and operate part block 20/15.
Faroe Petroleum (FPM) which is focused principally on exploration, appraisal and undeveloped field opportunities in the Atlantic Margin, the North Sea and Norway, announces that it has been awarded two new exploration licences, one west of Shetland and one in the Southern Gas basin, under the UK 25th Licensing Round. Defiant (Block 208/21) – working interest 30% and Narwhal (Block 44/29c) working interest 20%
Oilexco (OIL) has announced has been able to negotiate an extension of Pounds Sterling 70 million of its Pounds Sterling 100 million Pre-Development Facility from the current repayment date of January 31, 2009 to November 30, 2009.
Heritage Oil (HOIL) provided an interim management update of which the key operational highlights, first exploration well in Block 1 Warthog-2 which was a discovery, record production test results from Kinfisher-2 in Block 3A and its current cash balance of US$113 million which according to the company covers ongoing work programme and current plans for 2009.
Near term newsflow includes spudding in Block 1 Uganda of Buffalo and Giraffe prospect in November and December 2008. Buffalo and Giraffe prospects were assessed independently by RPS Energy, as at 30 September 2007, to have mean gross un-risked prospective resources of 420 million and 89 million barrels of oil respectively.
Comments: With two high impact exploration wells to be spudded over the coming weeks in Uganda and a rig secured for the Miran West-1 exploration well in Kurdistan successful outcomes could add much momentum to the company.
European Nickel (ENK) announced that through its wholly owned subsidiary Adriatic Nickel Resources Sh.p.k, signed a binding term sheet with Balkan Resources Inc, a privately owned Canadian company, to jointly develop Balkan's Kokogllave and the Company's contiguous Devolli nickel laterite deposits in Albania. The Company’s Devolli nickel laterite deposit is located in south-eastern Albania, close to the Greek border and has a JORC resource of 427,000 tonnes of contained nickel (35.6 million tonnes at 1.20% nickel).Balkan has completed a NI 43-101 technical report on its Koko nickel laterite deposit and it is intended to develop both deposits as one single mining operation. The Koko tenement has a historic resource estimate, which is neither JORC nor 43-101 compliant, of approximately 30Mt at a grade of approximately 1.2% nickel.
Comments: The delays in gas sales in Russia may not be received well by the market. We however note that JKX is trading at about half our estimation of core NAV. Given the company is already generating cash (existing production) and well funded, we believe that any further weakness in the share associated with this release could be a god entry point in the stock.
Gas matters reports that Argentina will give tax breaks to oil companies that increase their output, and to refiners that expand facilities or build new ones, the planning minister said today.
Comments: Independent operators in Argentina include Antrim and Geopark.
Volga Gas (VGAS, 87.5p,▲ (3.55%)) announced yesterday that Kulyaev, Alexander Alekseevich has cancelled all proceedings filed against Volga Gas' 100% wholly-owned subsidiary Woodhurst Holdings and Trans Nafta. Volga Gas has also ceased its arbitration proceedings in London following news of the cancellation of the lawsuit. Following the cessation of all proceedings, Volga Gas expects that production at Vostochny-Makarovskoye will be able to come on stream in 1H 2009.
Comments: this is the third positive sign posts that Russia is accommodating private investors: 1. Resolution of TNK-BP ownership battle, 2. Regulatory approval of the ONGC/Imperial deal, 3. And now uncertainty on Volga licences removed. Certainly positive for investors sentiment vis a vis Russia.
Premier Oil (PMO, 725.5p,▼ (3.65 %))indicates that in the current environment, they are well placed to pursue acquisition opportunities.
Stratic Energy (SE) announces that it has been awarded three blocks in the U.K. 25th Offshore Licensing Round. The Licences awarded to Stratic include blocks 42/10 and 42/15 in the Southern Gas Basin adjacent to the Breagh gas discovery and part block 20/15 in the Central North Sea. Stratic will have a 20% interest in blocks 42/10 and 42/15 operated by Sterling Resources. The blocks are located approximately 20km from the Breagh discovery, in which Stratic has a 10% interest, and where the partnership is currently preparing to spud the second of two appraisal wells to be drilled this year. In the Central North Sea, Stratic will have 100% and operate part block 20/15.
Faroe Petroleum (FPM) which is focused principally on exploration, appraisal and undeveloped field opportunities in the Atlantic Margin, the North Sea and Norway, announces that it has been awarded two new exploration licences, one west of Shetland and one in the Southern Gas basin, under the UK 25th Licensing Round. Defiant (Block 208/21) – working interest 30% and Narwhal (Block 44/29c) working interest 20%
Oilexco (OIL) has announced has been able to negotiate an extension of Pounds Sterling 70 million of its Pounds Sterling 100 million Pre-Development Facility from the current repayment date of January 31, 2009 to November 30, 2009.
Heritage Oil (HOIL) provided an interim management update of which the key operational highlights, first exploration well in Block 1 Warthog-2 which was a discovery, record production test results from Kinfisher-2 in Block 3A and its current cash balance of US$113 million which according to the company covers ongoing work programme and current plans for 2009.
Near term newsflow includes spudding in Block 1 Uganda of Buffalo and Giraffe prospect in November and December 2008. Buffalo and Giraffe prospects were assessed independently by RPS Energy, as at 30 September 2007, to have mean gross un-risked prospective resources of 420 million and 89 million barrels of oil respectively.
Comments: With two high impact exploration wells to be spudded over the coming weeks in Uganda and a rig secured for the Miran West-1 exploration well in Kurdistan successful outcomes could add much momentum to the company.
European Nickel (ENK) announced that through its wholly owned subsidiary Adriatic Nickel Resources Sh.p.k, signed a binding term sheet with Balkan Resources Inc, a privately owned Canadian company, to jointly develop Balkan's Kokogllave and the Company's contiguous Devolli nickel laterite deposits in Albania. The Company’s Devolli nickel laterite deposit is located in south-eastern Albania, close to the Greek border and has a JORC resource of 427,000 tonnes of contained nickel (35.6 million tonnes at 1.20% nickel).Balkan has completed a NI 43-101 technical report on its Koko nickel laterite deposit and it is intended to develop both deposits as one single mining operation. The Koko tenement has a historic resource estimate, which is neither JORC nor 43-101 compliant, of approximately 30Mt at a grade of approximately 1.2% nickel.
