Daily Oil & Gas Monitor
Premier Oil (LON:PMO) – Luno II Test Advances Field: Today’s disclosure that the Company has conducted a successful test on the Luno II well is another step forwards in the asset’s appraisal and a step closer to a declaration of commerciality. We believe that this news will continue to buoy the share price, and supports our BUY Recommendation and 485p Target Price.
Providence Resources (LON:PVR) – Porcupine on the Map: Today’s announcement from Providence Resources that Cairn Energy has farmed into its licences in Quad 35 (2/04, 4/08 & Option 11/2), subject to a $20M cap on the first well. This is not only an indictment of the technical work that has been completed to date, but also announces the establishment of the Porcupine basin as an exploration hot spot, if any more were needed of course. This is good news not only for Providence, and its immediate partners in the licence blocks, but the wider participants in the Porcupine basin such as Fastnet (FAST LN) and Petrel Resources (PET LN).
In this news:
• Appraisal well at Spanish Point
• Further well to be drilled on another target
• 3D seismic acquisition.
TXO (LON:TXO) – Empire’s SmartWin Case Inches to Resolution: Today’s news that Empire Energy is moving for a dismissal of SmartWin’s case is another step forward in Empire’s attempt to clean up its shareholding. The only interest for TXO is that it will receive 50% of any awards to Empire in respect of its counter claim, but we do not consolidate any value to such situations, regardless of their respective merits. However, what is does continue to do is focus attention on the value in its GBG business, which is on the cusp of generating revenues; net positive cash flow should follow soon thereafter due to the minimal manning and investment required in the preliminary stages. We are taking this opportunity to reiterate our 0.4p Target Price and BUY Recommendation.
BP (LON:BP.) – Buyback Continues: BP’s management team are awash with cash at the moment, so much so they appear to not know what to do with it. We believe that despite the support for the share price coming from the share buyback scheme, the shares will come under increasing pressure, as the US’ Moncando litigation process rumbles on. We see considerable value in the stock, above current levels, but concede that the share price will worsen before it get better, mostly in line with the vacillations in court.
BG Group (LON:BG.) – Queensland Gas Agreements Executed: What must seem like a relief to BG’s management team at the moment, with the announcement of definitive agreements being signed for Queensland Curtis LNG. Following what was a difficult period, we believe that the share price will start to recover towards where we believe that it should be.
Sound Oil (LON:SOU) – Step by Step…: Today’s news that the rig scheduled to drill its Nervesa appraisal well has begun the final stages of its current programme in the Netherlands allows the Company to put some more substance to its drilling guidance; the Company expects drilling to start at the end of the month.
Max Petroleum (LON:MXP) – Each Well is a Step: Today’s news that the ZMA-E6 development well in the Zhana Makat Field on Block E has been spudded is a welcome boon, as each well in the programme is a step towards not only stabilising the Company, but allowing it to plan for a longer-term future. We are reiterating our BUY Recommendation and 10p Target Price.