Headlines
Nighthawk (LON:HAWK) – Management Taking Right Steps: While the outcome of the discussions on the RBL covenants can't be presaged, we continue to believe that the management team will be able to achieve the best outcome possible for shareholders.
News Items
Independent Oil and Gas (LON:IOG) – Next Stage Complete
Exillon Energy (LON:EXI) – Production Report
News Items
Nighthawk – Management Taking Right Steps
News that the discussions concerning its breaches to the covenants of its RBL are ongoing is concerning, but not altogether surprising given the state of the oil market currently. Of better news to our mind, is that ten hedging programme has covered off the majority (66%) of the Company's cash needs for 2016. We have said of Nighthawk that:
The Company needs to ensure there is sufficient production, even at depressed oil prices, to meet its obligations and have sufficient in reserve to grow the business, preferably coincident with an uptick in oil prices.
And today's news, while can’t ordinarily be called positive, in the context of the market and point in the cycle, are as positive as they can be.
While the outcome of the discussions on the RBL covenants can't be presaged, we continue to believe that the management team will be able to achieve the best outcome possible for shareholders.
In Brief
Independent Oil and Gas (LON:IOG) – Next Stage Complete: News that the well management contract has been signed is a positive step forwards. While we believe that there will inevitably be a fundraising in the future, it will be from a higher base than currently.
Exillon Energy (LON:EXI) – Production Report: November's production report sees the continuation of the decline in production, but given the need for the marshy land to freeze to allow access, we believe that this will be part of the seasonal pattern. What we would like to see it to what extent the Company will build infrastructure and pads for the year, versus immediate production increases.