Proactive Investors - Run By Investors For Investors

SP Angel Morning Oil & Gas President Energy, JKX Oil and Gas and MX Oil

SP Angel Morning Oil & Gas President Energy, JKX Oil and Gas and MX Oil

Headlines
• JKX Oil and Gas (LON:JKX) – Tax Rate Revision Alleviates Pressure: Whilst the outcome of the shareholder action by Proxima Capital Group is as yet uncertain, today’s news will be a welcome fillip for the shares which have been beleaguered in recent time by the impact of a number of things, some of which have been self-inflicted, others such as Russia’s invasion of Ukraine, out of its control.
President Energy (LON:PPC) – Argentine Update Welcome: We believe that both of the items disclosed in today’s announcement (operational successes with the workovers and liberalisation of the hydrocarbon sector) will have a positive impact not only on the share price immediately, but could also alter management perception on the geography of its investment in Latin America.
MX Oil (LON:MXO) – Awards Promising, But More Information Needed: We believe that the impending CPR will provide a significant amount of clarity (outwardly at least) to the investment and allow the market to assess the value of the proposed investment. Regardless of that, on the face of it this news is positive for the Company.

News Items
JKX Oil and Gas (LON:JKX) – Tax Rate Revision Alleviates Pressure
Ukrainian government is elected to revive the production tax 55% to 29% provides significant relief to the Company, and ultimately will have a positive impact not only on the economics of the field, but the Company’s immediate need for cash flow.

It will also help the current management team in their bid to remain intact following the previously announced shareholder action brought by the Proxima Capital Group, to unseat the current board and replace them with largely banking and accounting experienced directors.

What is certain is that today’s news alone will provide support to what has become a beleaguered stock, what is less certain is whether the arbitration that it is currently engaged in (claim - $270mm) with the Ukrainian government either has merit, or will be successful.

Investors in JKX have endured a torrid time over the last five years, which has seen the share price fall from approximately 345p to today’s current level, and although some of the blame can rest squarely with the existing management team, we believe that collectively they have demonstrated that they have learnt from their mistakes, and given the oft fragile nature of operating in Ukraine, we believe that there is merit to the management claim that the operating future of the Company could be impaired by their wholesale removal.

Whilst the outcome of the shareholder action by Proxima Capital Group is as yet uncertain, today’s news will be a welcome fillip for the shares which have been beleaguered in recent time by the impact of a number of things, some of which have been self-inflicted, others such as Russia’s invasion of Ukraine, out of its control.

President Energy (LON:PPC) – Argentine Update Welcome
operationally, today’s news is a step forwards, however, we can’t help but think that the most significant improvement to the fortunes of President’s Argentinian operations has been the change in government. In the short time that Marci has been in power, his government had made its intent known that it will not only liberalise the hydrocarbon industry, but in floating the peso, has demonstrated a willingness to open the country to foreign direct investment.

To our mind we believe that while the success of the two workovers to date lift the Company, the positive impact of these has been amplified and superseded by the positive impact that the changes in government policy have had on the Company’s outlook for its Argentinian businesses.

We believe that both of the items disclosed in today’s announcement (operational successes with the workovers and liberalisation of the hydrocarbon sector) will have a positive impact not only on the share price immediately, but could also alter management perception on the geography of its investment in Latin America.

MX Oil (LON:MXO) – Awards Promising, But More Information Needed
Today’s news in which management provides more detail on its recent awards (Tecolutla, La Laja, Ponton, and Paso de Oro), are welcome, and on the face of it appear to be promising. We are still uncertain of, however, the fiscal terms of the Land Contract Area arrangement.

We believe that the impending CPR will provide a significant amount of clarity (outwardly at least) to the investment and allow the market to assess the value of the proposed investment. Regardless of that, on the face of it this news is positive for the Company.

We may provide a further update on one, or all, of the stories above later today. However, if there is anything that you would like to discuss, please feel free to contact us.

DISCLAIMER

This note has been issued by SP Angel Corporate Finance LLP (“SP Angel”) in order to promote its investment services.

This information is a marketing communication for the purpose of the European Markets in Financial Instruments Directive (MiFID) and FCA’s Rules. It has not been prepared in accordance with the legal requirements designed to promote the independence or objectivity of investment research.

This document is not based upon detailed analysis by SP Angel of any market; issuer or security named herein and does not constitute a formal research recommendation, either expressly or otherwise.

The value of investments contained herein may go up or down. Where investment is made in currencies other than the base currency of the investment, movements in exchange rates will have an effect on the value, either favourable or unfavourable. Securities issued in emerging markets are typically subject to greater volatility and risk of loss.

This note is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments. This information is for the sole use of Eligible Counterparties and Professional Customers only and is not intended for Retail Clients, as defined by the rules of the Financial Conduct Authority (“FCA”) and  subject to SP Angel’s Terms of Business as published or communicated to clients from time to time.

It is not investment advice and does not take into account the investment objectives and policies, financial position or portfolio composition of any recipient. This document should not to be relied upon as authoritative or taken in substitution for the exercise of you own commercial judgment. SP Angel is not responsible for any errors, omissions or for the results obtained from the use of the information in this document.

This document has been prepared on the basis of economic data, trading patterns, actual market news and events, and is only valid on the date of publication. SP Angel does not make any guarantee, representation or warranty, (either expressly or implied), as to the factual accuracy, completeness, or sufficiency of information contained herein. This document has been prepared by the author based upon information sources believed to be reliable and prepared in good faith.

SP Angel, its partners, officers and or employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s).

SP Angel Corporate Finance LLP is a company registered in England and Wales with company number OC317049 and whose registered office address is Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.  SP Angel Corporate Finance LLP  is authorised and regulated by the Financial Conduct Authority whose address is 25, The North Colonnade, Canary Wharf, London E14 5HS and is a Member of the London Stock Exchange plc.

© Proactive Investors 2019

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