• In Brief:
o ECO Atlantic (LON:ECO/LON:EOG – 19p/C$0.29) – Total Farmin
o Eland Oil and Gas (LON:ELA – 55p) – Strong Start to 2017
o Victoria Oil & Gas (LON:VOG – 70p) – Logbaba 107 More Than Just a Well
• Zoltav Resources*** (LON:ZOL – 14p) – Interims Point Way Forward: Today’s operation improvement, despite a decline in revenues, is a sign of the management team’s intent on extracting the maximum value from the asset base. Given that the Bortovoy geological review is yet to have an impact on the reserves and resources, we believe that this underlines the fact that the team are focused on maximising shareholder value from the asset base.
• ECO Atlantic (LON:ECO/LON:EOG – 19p/C$0.29) – Total Farmin: Today’s news that Total have farmed in to Orinduik is a vindication of the technical work that the Company has undertaken, if any more were needed post Tullow’s farmin. Shareholders should be pleased with this news as it effectively derisks the play from their perspective, while leaving them with a significant participation in a potentially blockbuster well. It must be remembered that both Tullow’s and Total have experience of this Atlantic Margin play, with both registering successful discoveries regionally in the past.
• Eland Oil and Gas (LON:ELA – 55p) – Strong Start to 2017: After what has been a difficult 12 – 18-month period for the Company, todays results underline the fact that the management team have navigated these difficulties well, and emerged much the stronger for it. While of course vigilance is required to maintain that position, we believe that Eland now has a strong platform from which to grow.
• Nighthawk Energy (LON:HAWK – 0.38p) – Plus Ça Change Plus c’est la Même Chose: That the production outlined in today’s results have declined, is disappointing, especially when set against the context of the forward programme that was set out in its March 8th 2016 presentation (the “2016 Plan”). The latest programme outlined in the August 2017 Presentation (the “2017 Plan”) has little of the detail of past presentations, which is probably deliberate, as management most likely don’t wish to be held to account. What is even more a damning verdict on the 2017 Plan is that fact that with a rising oil price environment, why the reserve base is declining. While this latest round of projects may have the impact alluded to, by not outlining the project in the same detail, the management have removed the only yardstick against which th ey can be measured. Irrespective of that, as a matter of urgency the management need to reconcile the 2016 Plan to the 2017 Plan, disclosing to the Company’s owners what has changed, and why. With that kind of clarity, the management team can start to build the trust that has been eroded, not just by this team, but by a number of predecessors.
• Victoria Oil & Gas (LON:VOG – 70p) – Logbaba 107 More Than Just a Well: Today’s news, that a development well is flowing, would be more news worthy had it not, but having said that, the flow is impressive, albeit unsurprising given the reservoir pressurisation and modern well completion. What is better news, however, is the fact that this was not a an easy well to drill, and it has been completed safely and without incident. It is good news too for the midstream company as it effectively gives it a lot more runway to sign new sales agreements and enter in to longer term contracts. In short, this is excellent news, but tangential, or secondary, to the well itself.