Headlines
• Sound Oil (LON:SOU) – New Dawn: Entry to Morocco’s Tendara licence is the evolution of the focus on areas where it has a differentiating offering, and one which lifts the medium to longer term outlook.
• Victoria Oil and Gas (LON:VOG) – Strengthening its Hand: Now that Cameroon appears to be starting to purr nicely, we believe that the management should switch to the disposal of noncore assets, such as Kazakhstan and Russia.
• Oilex (LON:OEX/ASX:OEX) – Next Stage Beckons: Today's news is a solid step forwards for the Company, and while it is one that deserves to be congratulated, the next stages are now the most important, such as the field's full development strategy and the use of proceeds to generate further value.
News Items
Sound Oil (LON:SOU) – New Dawn
Today's news that the Company has farmed in to the Tendara licence represents the first stage in the execution of its "Mediterranean Basin" strategy which not only compliments its existing portfolio, but adds diversity, but geographically and operationally.
Shareholders should be pleased with today's news, which represents a significant step forwards for the Company that has been restructured from an overly diverse operating company with too little leverage to compete globally, to one that is focused in areas it can make a difference.
Entry to Morocco’s Tendara licence is the evolution of the focus on areas where it has a differentiating offering, and one which lifts the medium to longer term outlook.
Victoria Oil and Gas (LON:VOG) – Strengthening its Hand
Today's news of new thermal customers is another step forwards for the Company, and one that now marks it as a fully-fledged midstream operator that just happens to have an upstream asset.
We have previously stated that:
The businesses have two differing risk profiles, and if the wider midstream opportunity develops as it appears as it is, there could be a perceived conflict of interest with the client base of the midstream business. We believe that the midstream business can leverage its leadership position in Cameroon to tap in to the new gas finds offshore, especially as the Ferrostaal fertiliser plant FID is still in the offing; it could be the midstream development partner to the whole area.
and we still believe that this is where the future of the Company lies.
Now that Cameroon appears to be starting to purr nicely, we believe that the management should switch to the disposal of noncore assets, such as Kazakhstan and Russia.
Oilex (LON:OEX/ASX:OEX) – Next Stage Beckons
Today's news that Oilex's Cambay field is entering the final stages of commissioning is good news, not just for the Company, but shareholders too. Now that the near term cash flow has been shored up, we believe that the next stage is for management to focus on how to maximise the benefits from its ownership of Cambay to generate further value for shareholders.
The next stage is going to be vital, as it is going to be key to understanding the direction the Company intends to move in next. Of course, we are assuming that Cambay will produce sufficient excess cash flow to deploy elsewhere in the portfolio, which is something that the management team will have to ensure.
Today's news is a solid step forwards for the Company, and while it is one that deserves to be congratulated, the next stages are now the most important, such as the field's full development strategy and the use of proceeds to generate further value.