logo-loader
viewCabot Energy plc

Cabot Energy has had a “seriously good kick-start” - analyst

“One thing is sure they will be turning heads in Calgary and that is all good for attracting partners and furthering their success”

onshore drilling operation
Cabot is targeting 800 to 1,000 barrels a day by the end of the year

Cabot Energy Plc (LON:CAB) has shown that its Canadian business has had a “seriously good kick-start”, according to WH Ireland analyst Brendan Long, who reckons the relaunched group will be turning heads in Calgary.

In a statement, on Thursday, Cabot told investors it has been producing some 550 barrels of oil per day, which is in line with guidance, and its summer programme is set to expand on that significantly.

The company, previously known as Northern Petroleum, expects the new work programme to target an additional 300 bopd. It will include two side-tracks from existing wells, plus recompletion of two previously drilled wells and work-overs to three other wells.

READ: Cabot Energy production ‘on track’ ahead of summer growth programmes

It is budgeted to cost some US$3.5mln, and sets the newly relaunched group up for a year-end production target between 800 and 1,000 bopd.

WH Ireland’s Brendan Long, in a note, said: “1,000 b/d is a key milestone and although it is an ambitious target and the high-end of the range, shareholders should take note that Cabot is aiming high, moving fast and delivering.

A successful high-growth oil company

“Most importantly is the capex side of the equation – the returns on these modest investments tells the real story of how Cabot has emerged as a successful high-growth oil company with material production.

“They have hardly used any capital. We are unsure for how long this model will last because it is unusual for such gains to be realised in a mature/safe petroleum province, time will tell.

“For now we see a seriously good kick-start.”

Long added: “So much for an AIM company not being able beat the locals at their own game, or has Cabot gone local?

“One thing is sure they will be turning heads in Calgary and that is all good for attracting partners and furthering their success.”

Chief executive Keith Bush ‘pleased’ with growth

Chief executive Keith Bush, in a statement, said: "I am very pleased to see the growing levels of production from Canada following the successful completion of the work programme from the first half of the year.

“Additional production from here should see increasingly material cashflow, even at current oil prices, and I am confident in the upside potential of the assets, both from a production and cashflow perspective.”

Quick facts: Cabot Energy plc

Price: 2.5 GBX

AIM:CAB
Market: AIM
Market Cap: £1.15 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Cabot Energy plc named herein, including the promotion by the Company of Cabot Energy plc in any Content on the Site, the Company receives from...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Investor Update: Circassia boosts first-half revenues by 40%

Headlines from the Proactive UK newsroom. Drug inhaler specialist Circassia (LON:CIR) increased revenues by 40% to £27.9mln in the half year to June and expects sales to rise to betwee £60-65mn over the full year. Sales recently started in China and are going well.  Eurasia Mining...

on 26/9/19

2 min read