Headlines
• Union Jack Oil* (LON:UJO) (BUY - 0.84p) – Funding Gives Flexibility: Today's announcement of further funding for the Company is timely, in that it comes ahead of the anticipated Wressle development, which should see first oil in 1Q'16, and the 2016 drilling programme, which contains the Biscathorpe appraisal well, the Keddington stepout well and the Louth, North Somercotes and North Kelsey exploration wells. We are taking this opportunity to reiterate our BUY Recommendation and 0.84p Target Price.
• Providence Resources (LON:PVR) – Positive Update, But...: In this respect, we believe that today's news, while positive, may well get lost in the rush of apathy as people refocus on Barryroe. While there may well be an argument for that, we think that with progress being made towards drilling in Spanish point, it makes the Company more stable and diversifies away from being a one hit wonder, even though the one hit is significant.
• Serica Energy (LON:SQZ) – The Whole is Greater Than the Sum of Parts: While the Extension is fractionally accretive to value, it's addition, in providing greater autonomy to Serica, unlocks a greater value, and in this instance, the whole really is greater than the sum of parts.
News Items
Union Jack Oil* (LON:UJO) (BUY - 0.84p) – Funding Gives Flexibility
Today's announcement of further funding for the Company is timely, in that it comes ahead of the anticipated Wressle development, which should see first oil in 1Q'16, and the 2016 drilling programme, which contains the Biscathorpe appraisal well, the Keddington stepout well and the Louth, North Somercotes and North Kelsey exploration wells.
We are taking this opportunity to reiterate our BUY Recommendation and 0.84p Target Price.
Providence Resources (LON:PVR) – Positive Update, But...
Today's news from the Company is positive in the sense that it takes another appraisal asset forwards, and in Spanish point, we believe that this is the most likely to generate cash flow this side of 2020.
That's said, irrespective of what is said, investors will be more concerned with what is happening at Barryroe, as this (to our mind at least) has been one of the big successes for the Company over the last 5 years.
In this respect, we believe that today's news, while positive, may well get lost in the rush of apathy as people refocus on Barryroe. While there may well be an argument for that, we think that with progress being made towards drilling in Spanish point, it makes the Company more stable and diversifies away from being a one hit wonder, even though the one hit is significant.
Serica Energy (LON:SQZ) – The Whole is Greater Than the Sum of Parts
Today's news of the acquisition of the interest in the Columbus Extension ("Extension") is welcome, and while not earth shattering, is further evidence of the operational management's continued focus on the detail, opposed to sweeping strategic vision, which is essential to not only survive in weak oil price environments, but thrive too, as Serica is doing here.
With the additional interest, while not having a company changing impact on the valuation, it provides Serica with greater leverage over the regional infrastructure owners to negotiate access, which in so doing unlocks the development, and creates greater value than just the acquisition alone.
While the Extension is fractionally accretive to value, it's addition, in providing greater autonomy to Serica, unlocks a greater value, and in this instance, the whole really is greater than the sum of parts.