Headlines
• Exillon Energy (LON:EXI – 80p) – The Future Programme is Now More Important: There is now a need for the Company to start to think more strategically about its asset base and start to deliver meaningful cash flow against the progress that it has made at the drillbit in fining reserves to add the state register, or it will precipitate an environment where investors start to wonder why.
• In Brief:
o IGAS (LON:IGAS – 15p) – Jam Tomorrow? Not Quite
News Items
Exillon Energy (LON:EXI – 80p) – The Future Programme is Now More Important
Today's news that production has declined again is not a great surprise as the full winter drilling plan will not have delivered meaningful results by now, but the lack of commentary on the current programme or the drilling strategy leaves you thinking the worst. We have said previously that:
We would, however, like to get a greater understanding ahead of the winter programme, of what the approach will be – whether it’s going to be solely focused on the construction of a sufficient number of platforms and interconnecting all-weather roads to allow it to drill and complete throughout the remainder of the year, or as has been the case in the past, it is constructing enough platforms and interconnecting roads for it to be able to complete its targeted drilling programme for the winter.
and we will reiterate this stance at every opportunity until the Company discloses what it intends to do in order to develop its asset base, especially as the Company has added reserves/resources to the Russian asset register.
There is now a need for the Company to start to think more strategically about its asset base and start to deliver meaningful cash flow against the progress that it has made at the drillbit in fining reserves to add the state register, or it will precipitate an environment where investors start to wonder why.
In Brief
• IGAS (LON:IGAS – 15p) – Jam Tomorrow? Not Quite: Today's earnings are a creditable performance in what has been a torrid time for the Company. That they only made ~$2mm for all the effort seems to be a significant let down, for investors and the Company's officers alike. Still, the debt is being serviced, and the Company is in a solid position for the future. Our only concern, currently, is what the Company will look like once the hedges expire and the cash flow is not buoyed by these instruments. Once that has become clearer, we believe that IGAS will be one for the medium to longer term.
We may provide a further update on one, or all, of the stories above later today. However, if there is anything that you would like to discuss, please feel free to contact us.