Headlines
• Rex International*– BUY (S$0.91) – RVD the Silver lining to Zumba's Cloud: Today's news, while disappointing for investors, the key take away from this disappointment is the continued success of RVD to predict the presence of hydrocarbons. While today we move the Target Price to S$0.91, to reflect the loss of Zumba, we are reiterating our BUY Recommendation.
• Sound Oil (LON:SOU) – Ready for Take-off: We believe investors will be pleased with the progress so far, and now with sufficient resources on the balance sheet, enough to get the Company a significant way towards believe self-sustaining, which will see a better reflection of its intrinsic asset value in its market "worth."
• 88Energy (LON:88E/ASX:88E) – Savvy Use of Debt: Today's news should buoy investors, as it is a significant steps forwards for the Company, and once executed, we believe will be the final element necessary to permit the drilling of Icewine-1 in 2015, before the rebate moves from ~85% to ~75%.
• LGO Energy (LON:LGO) – Proof of the Pudding is in the Eating… Tuck In!: Today news should continue to lift the share price, especially as the team have accomplished this through maximising the yield of every dollar invested. LGO Energy's shareholders should continue to be pleased with the performance of the management team.
• Nostra Terra (LON:NTOG) – Beefing Up: We believe that investors should be pleased with today's news, and what is signifies for the Company as a whole. Watch this space.
News Items
Rex International* (SGX:5WH) – BUY (S$0.91) – RVD the Silver lining to Zumba's Cloud
News overnight that the Zumba well failed to intersect commercially movable volumes of hydrocarbons is disappointing, and today's we adjust our target price to reflect the departure of this assets from our risked asset value contribution; our Target Price is now S$0.91.
The news, however, is not all doom and gloom in that the results, while not commercial, continue to provide further validation of the RVD technology, which correctly predicted the presence of oil. RVD has never claimed that it can assess the potential for commerciality, which is a function of reservoir macro issues such as porosity and permeability.
Today's news, while disappointing for investors, the key take away from this disappointment is the continued success of RVD to predict the presence of hydrocarbons. While today we move the Target Price to S$0.91, to reflect the loss of Zumba, we are reiterating our BUY Recommendation.
Sound Oil (LON:SOU) – Ready for Take-off
Today's news that acceptances representing over 15.5mm shares have been returned is a reflection of the momentum that is starting to gather at the Company, and with the pending completion of Tendara transaction, the outlook continues to brighten.
We believe that once Tendara closes, the Company will have a significant development and appraisal portfolio, and can rightly be deemed to be transformational, and once online, will be more than sufficient to support its investment elsewhere in the Company.
We believe investors will be pleased with the progress so far, and now with sufficient resources on the balance sheet, enough to get the Company a significant way towards believe self-sustaining, which will see a better reflection of the Company's intrinsic asset value in its market "worth."
88Energy (LON:88E/ASX:88E) – Savvy Use of Debt
News that an exploration company has entered in to a debt agreement with an institution is ordinarily a sell signal, but in this case, given that Alaska promotes exploration spending in the same manner as Norway, buy immediately refunding (within a month) the approved and audited expenditures incurred in the course of exploration, we believe that this deal is a smart and savvy way to fund the exploration programme without excessive dilution to shareholders.
Today's news should buoy investors, as it is a significant steps forwards for the Company, and once executed, we believe will be the final element necessary to permit the drilling of Icewine-1 in 2015, before the rebate moves from ~85% to ~75%.
LGO Energy (LON:LGO) – Proof of the Pudding is in the Eating… Tuck In!
Today's news that LGO's resources on Goudron have been upgraded shouldn't be a surprise given the extent of the work that has been invented by the Company's team, but that they have been so significant is a reflection of the quality of operation execution that has been undertaken.
Today news should continue to lift the share price, especially as the team have accomplished this through maximising the yield of every dollar invested. LGO Energy's shareholders should continue to be pleased with the performance of the executive management.
Nostra Terra (LON:NTOG) – Beefing Up
News today of Ewen Ainsworth's appointment to the board of Nostra Terra is a reflection of two things: (i) that Ainsworth is back in the market; (ii) the Company is serious about moving itself forward to a point at which its growth is self-sustaining.
We believe that investors should be pleased with today's news, and what is signifies for the Company as a whole. Watch this space.