Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Genel Energy PLC (GENL.L) - Capital Network - Good Time to Revisit the Equity Story

Genel Energy PLC (Genel) is a London-listed oil and gas production company with assets in the Kurdistan region of Northern Iraq (KRI), Somaliland and Morocco. Political instability in Iraq and the rise of ISIS created a particularly challenging stock market sentiment for companies active in the region, such as Genel Energy PLC, with concerns about security compounding those from irregular oil sales payments. More recently, sharp production declines and subsequent reserves downgrades at one of Genel Energy PLC’s main oil asset increased the pressure on the company already suffering from the collapse in the oil price. We believe that after recent reserves downgrades and with potential progress anticipated for the Miran/Bina Bawi gas development, it might be a good time to revisit the equity story, with a view on the mediumterm development of these assets.
Genel Energy PLC (GENL.L) - Capital Network - Good Time to Revisit the Equity Story

 

We believe that Genel’s current share price of c115p represents a material discount to our estimate of the risked value of the company. In addition, we believe the possibility of progress on the development of the KRI gas assets represent real upside – as such we reckon that now could be a good time to revisit the equity story with a view on the medium-term development of these assets

Full report is available via Capital Network website
View full GENL profile View Profile

Genel Energy PLC Timeline

Related Researches

no_picture_pai.jpg
September 20 2017

Green Dragon Gas Ltd (LON:GDG) announced that it has finalised agreements with CUCBM, a subsidiary of CNOOC and Green Dragon Gas Ltd (LON:GDG) partner in the GSS and GSN Blocks, which conclude eight years of discussions regarding Green Dragon Gas Ltd (LON:GDG) interest in the wells historically drilled by CUCBM in the two Blocks. These agreements confirm the respective interests of the partners as well as the amount of costs recovery resulting from CUCBM’s work programme for the period 2007-2014. Although we welcome this announcement, it is unclear from the RNS whether these agreements have an immediate impact on either GDG’s gas reserves or on future production, revenue and cash flows. We suspect most of the positive impact to be expressed in a closer future cooperation between the two partners focussed on the monetisation of gas resources, which should be positive for investors’ sentiment and have a positive impact on the share price. However, we keep our 221p valuation unchanged.

This announcement follows an earlier announcement by GDG (15/09/17) of the approval of a Project Code for the Overall Development Plan (ODP) on the GCZ block by the China National Development and Reform Commission (NDRC), confirming its final approval. The Block is jointly operated by CNPC and GDG through a joint management team based in Jincheng, Shanxi. The development cost for GCZ will be c.US$53.8m over 2017 and 2018. CNPC will invest US$28.5m according to its 53% participating interest and GDG US$25.3m based on its 47% participating interest in the Block.

 

no_picture_pai.jpg
March 05 2018

G3 Exploration (LON:G3E), previously Green Dragon Gas, published an operational update for its Baotian-Qingshan (GGZ) Block, located in the Guizhou Province of Southern China.

no_picture_pai.jpg
December 13 2017

Green Dragon Gas Ltd (LON:GDG) announced its plans to list its production subsidiary on the Hong Kong Stock Exchange as a dividend in specie. This operation requires shareholders’ approval and a vote will take place at the AGM to be held on 20/12/17 at 11:00 am. We expect the details of the listing, in particular the shareholding structure of the listed entity as well as the amount of capital increase, to be released on this occasion. However, the intention is for the company to be debt free as a result which we take as a positive; we keep our 221p valuation unchanged.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use