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First Oil 10 January 2019 - SP Angel's Snapshot of Oil & Gas News

First Oil 10 January 2019 - SP Angel's Snapshot of Oil & Gas News

 

10th January 2019

Headlines

  • In Brief:
    • Aminex (LON:AEX) - 1.48p – Beal Adds Rigour
    • Angus Energy (LON:ANGS) - 10p – Curiouser & Curiouser
    • Petro Matad (LON:MATD - 3.08p – Heron Bearing Gifts
    • Petroneft Resources (LON:PTR) - 1.27p – Sturt & Johnson a Solid Team
    • Premier Oil (LON:PMO) – 76p - Risk Mitigation the Real Positive

In Brief

  • Aminex (LON:AEX) – 1.48p – Beal Adds Rigour: While there is little new added to the knowledge base from today’s announcement, what is a significant positive is the fact that Beal has joined the board.

    We believe Beale’s addition will bring a level of rigour and discipline that will add not only to investor’s confidence but their likelihood of realising value from their ownership of the Company.  
  • Angus Energy (LON:ANGS) – 10p – Curiouser & Curiouser: News that a General Meeting has been requisition by what seems like the Company’s past Chairman Jonathan Tidswell-Pretorious (“JTP”), seeking to replace the existing board is a curious step.

    Given that JTP was removed for what can only be considered a serious lapse in judgement, one is left with the question as to:

      1. What he hopes to achieve that isn’t being done presently;

  2. What does he think he can do better; and

  3. How can anybody have faith in his judgement given his recent history.

We don’t have answers to any of these questions, but they must be incumbent on JTP to address if he wants to take the remaining ~90% of shareholders with him.

One would suggest that if he fails, his tenure as an employee will be short lived, so this raises the question as to what is so important that he feels that he has to risk everything to do it? It is a very curious position, and one that will need to be resolved to the satisfaction of the majority of shareholders, one way or another.

 

  • Petro Matad (LON:MATD) – 3.08p – Heron Bearing Gifts: While it is always difficult to be upbeat in the wake of a dry well, the management team has disclosed that its seismic work programme has delineated a tie between the Petro China discovery well L19/46-3 and what was the Heron prospect 1km to the south, with sufficient confidence to upgrade it to an appraisal well. While the drilling will be the arbiter of the validity of the seismic study, this is a significant positive for the Company.
  • Petroneft Resources (LON:PTR) – 1.27p – Sturt & Johnson a Solid Team: News that Sturt will take over as CEO in 1Q seems a little harsh on Johnson, who is more than adequately qualified to do the job on a more permanent basis. However, given Sturt’s excellent track record in the FSU and Johnson's superb work as COO, we believe that the combination of the two creates significant value for the Company and its shareholders.

    While the Company has already disclosed that it is reviewing its options for its portfolio, we believe that the combination of the two makes a successful outcome more likely and if offers are not forthcoming, that the value within the portfolio will be more likely to be unlocked.
  • Premier Oil (LON:PMO) – 76p - Risk Mitigation the Real Positive: The update outlined in this announcement provides a lot for both the bulls and bears on which to opine.

    The bulls will point towards the continued portfolio rationalisation and drilling success, the bears towards the high operating cost and ambitious investment programme, all set against the ~$2.3bn debt pile.

    The key read for us, however, is the fact that for the first time in a long time, we feel that the hedging programme provides real confidence in the management team’s approach to ensuring that there is sufficient cash flow to ensure that the debt pile is kept from becoming a significant issue.

    Net/net/net, we believe that the Company’s equity holders and creditors should be pleased with this update.

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