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Today's Market View - Mosman Oil & Gas; Wentworth Resources

Today's Market View - Mosman Oil & Gas; Wentworth Resources

Summary

In Brief

Mosman Oil & Gas*** (LON:MSMN) (0.24) – $6.32mm (0.78p)

Heading in the Right Direction

 

Wentworth Resources (LON:WEN) (18p)

London Calling to Faraway Towns

 

News In Brief

 Mosman Oil & Gas***

(LON:MSMN) (0.24)

$6.32mm (0.78p)

 Heading in the Right Direction

The update from the Company has underlined the progress that it is making towards reaching a point of self-sustainability, with the partial period that Stanley-1 was online making a significant contribution.

 

With Stanley-2 likely to throw more light on the expected degassing of the accumulation, and the subsequent production of liquids, we believe that the management will be in a position to update its reservoir model and better understand the potential of the asset.

 

Once the team has assessed all the data from Stanley-1 and 2, we are certain that the potential of the asset will be better elucidated, and more informed valuation on the asset be produced. Until such times as we have a better understanding of the asset and it's potential, we are maintaining book value contribution from its Stanley acquisition. Furthermore, we have also adjusted our expectation for the Welch horizontal well to 3Q'19.

 

Additionally, due to the apparent de-emphasis of the Australian assets, we are extending our expectations for the timing of exploration out to 2025, or beyond. Consequently, our valuation is adjusted to $6.32mm (0.78p). 

We look forward to being able to update our valuations following the company's technical analysis of its asset base. 

 

 Wentworth Resources

(LON:WEN) (18p)

 London Calling to Faraway Towns

It is incumbent on any management team of a listed company to provide not only as liquid a marketplace for the Company's owners as possible, but one that also appreciates the Company (reflected in valuations) and can provide it with liquidity. We believe that the decision to delist from Oslo and focus instead on its London listing is the net result of that assessment.

 

There was an adage that if the asset was in the same longitude as the US' Lower 48, that you should seek financing in the US. However, this isn't the case anymore, even for companies located in the Lower 48.

 

London has continued to expand its role in financing small to medium companies, a position which is being increasingly strengthened since the US market has appeared to pull up the liquidity drawbridge for oil & gas companies below $1bn market cap. 

 

We believe that the as the cycle draws on, this will become an increasing feature. So, as has been the case for a while, and with due respect to the Clash, London Calling to Far Away Towns....

 

 

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. 

 

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