Proactive Investors - Run By Investors For Investors

Today's Oil and Gas Update - Mosman Oil & Gas, Union Jack Oil, Volga Gas and more...

Today's Oil and Gas Update - Mosman Oil & Gas, Union Jack Oil, Volga Gas and more...

8th January 2019

Headlines

  • In Brief:
    • Mosman Oil & Gas*** (MSMN LN – 0.25p) – $9.80mm (1.63p) – Stanley Delayed, But Outlook Still Positive
    • Union Jack Oil*** (UJO LN – 0.13p) – $72.9mm (0.64p) – Biscathorpe Spudded
    • Volga Gas*** (VGAS LN – 52p) – $76mm (70p) – Production Update
    • San Leon Energy (SLE LN – 27p) – New RBL Improves Dividend Outlook

In Brief

  • Mosman Oil & Gas*** (MSMN LN – 0.25p) – $9.80mm (1.63p) – Stanley Delayed, But Outlook Still Positive: Poor weather in east Texas has contributed to a number of delays for UK companies operating in the area, which has also impacted Mosman’s operations, but this does not impact the subsurface.

The Stanley-2 appraisal well will provide a second data point following the positive outcome of the Stanley 1 well. The data will be used to confirm the geological model that has been developed to date and provide more data on the overall performance of the field.

Following the results, we look forward to the Company’s update on the asset and prospectivity of the new asset base. Ahead of the update, we are reiterating our $9.80mm (1.63p) valuation.

  • Union Jack Oil*** (UJO LN – 0.13p) – $72.9mm (0.64p) – Biscathorpe Spudded: News that Biscathorpe has spudded marks a significant step forward for the Company, as it is one of the three key activity drivers for the next 12 months. With West Newton expected in 1Q and Wressle’s appeal starting imminently, 2019 will be a year of activity.  
  • Volga Gas*** (VGAS LN – 52p) – $76mm (70p) – Production Update: News that production averaged 21.6mm cfpd for the December 2018 (year 218 – 18.8mm cfpd) sees the production average towards the historic longer-term production on 25mm cfpd.

As we highlighted previously, our plateau rate has been reduced and its length shortened until such times as the Company has undertaken the technical study and evaluated the performance of the reservoir, and outlined any remedial drilling as required.

We recognise that until such our estimate is likely to be on the conservative side, especially as we believe that the drive mechanism, coupled with further engineering solutions such as compression, could improve recoverability. Following today’s production update, our valuation remains $76mm (70p).

  • San Leon Energy (SLE LN – 27p) – New RBL Improves Dividend Outlook: While Eroton’s RBL does not directly impact San Leon, by refinancing the existing RBL on more advantageous terms, the extent of the previous restrictive covenants regarding the payment of dividends has been eased.

In so doing, it aides the classification of cash on the balance sheet as distributable cash, which is the key mechanism for the Company.

 

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