We believe that in order to achieve the well completion in the fourth quarter (Q4) of 2018, we would expect to see drill permits and a financing partner both announced during Q3. Once these milestones are in place, we believe that the share price could begin to more fully reflect the value of the Paradox Basin holding.Full report is available via Capital Network website
Rose Petroleum plc (LON:ROSE) provided an update on the likely completion date for the 3D seismic survey they are in the process of acquiring in the Paradox Basin, following the successful completion of a £3M funding. The 3D seismic data will be key to identify drill targets in the Cane Creek interval and other potential clastic reservoirs of the Paradox Formation, but also to steer the horizontal leg of the wells within the natural fracture system for optimal drilling and completion. Data acquisition started on 4/10/17 and should take up to five weeks; management expects to be in a position to select drilling targets by the end of the first quarter 2018. We have updated our project timeline accordingly, and believe the Company is well on track and has also indicated it may well advance this timeline. Management also identified a source of potential in the Leadville Limestone formation, additional to the resources estimated by Ryder Scott in 2014, in which the 3D seismic could identify potential structures.
Rose Petroleum (LON:ROSE) announced the completion of the initial structural interpretation of the 3D seismic data it acquired over its Gunnison Valley Unit (GVU) which is part of its larger lease holding in the Paradox Basin, Utah, U.S.A. As a result of this work, key geological structures and multiple drilling targets have been identified, with to date 53 well locations identified in the Cane Creek reservoir zone alone.
Itaconix PLC (LON:ITX) reported H1 results (18/09/2017) which showed good progress, with revenues of £0.3m (H1 2016 ongoing: nil) and new collaborative partnerships in key product segments.
In this report we examine some of the drivers which are supporting this rapid commercial adoption of Itaconix PLC (LON:ITX) technologies, including productspecific performance attributes and the long-term mega-trend towards environmental sustainability in specialty chemicals.
Itaconix PLC (LON:ITX) has transformed (and renamed) itself in recent years towards a tight focus on specialty polymers for home care, personal and consumer health care, and industrial products. The H1 results demonstrate that the strategy is now delivering real commercial progress. Some of the drivers include:
• A patented production process that combines the versatile chemistry of Itaconic acid with breakthrough economics. • A range of bio-based products which can replace petrochemical ingredients. Industry-wide changes are being driven by consumer preferences, regulatory changes and the “Together for Sustainability initiative within the specialty chemicals sector. • Virtually limitless headroom for growth, with addressable end markets of $30bn. • Existing commercial revenues growing strongly. • Strategic partners including Akzo Nobel, Croda, and Solvay broaden the available channel to market.
In this report we examine some of the drivers in detail, with an overview of product categories and key differentiators.
SHARE PRICE DRIVERS / CATALYSTS
At this early stage of growth we don’t believe that there is any basis to value the shares on 2017/18 multiples. But by 2020 we believe the company could be generating £12m of revenue which would imply the shares trade on a 2020 multiple of 1.2x EV/Sales compared to peers on 3-4x (e.g. Croda plc.). With growth potential extending well beyond 2020, it’s unlikely that the market would value Itaconix this cheaply, in our view.
In the meantime, we believe the main driver for the share price will be adoption of Itaconix products by additional commercial customers. We expect progress across all three end markets – home care, personal and consumer health care, and industrial.
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