Headlines
• In Brief:
Victoria Oil and Gas (LON:VOG – 43p) – Update Well Flagged
Independent Oil and Gas (LON:IOG – 17p) – What a difference Having Friends Makes
Serica Energy (LON:SQZ – 11p) – Reset, Restart
Jupiter Energy (LON:JPRL, ASX:JPR – 10p/A$0.25) – Stark Update
In Brief
Victoria Oil and Gas (LON:VOG – 43p) – Update Well Flagged: Today's update was realistically well telegraphed ahead of time, but it is still nonetheless good to see the increases in volumes feeding through. What impresses us more, however, is the growing diversity of the client base, which we expect to continue to grow. Given the delays to Ntinde and the fertiliser plant, we believe that VOG's market positioning continues to strengthen. All in all, we believe that the Company is gaining better balance, and save for the West Medvezhye asset in Russia, it is starting to now look like a West African vertically integrated gas company.
Independent Oil and Gas (LON:IOG – 17p) – What a difference Having Friends Makes: The acquisition of the Blythe discovery underlines the turnaround in the Company's fortunes, as well as the quality of the underlying strategy in the first place. While the stress levels could have been lower had London invested earlier, the timing hasn't mattered too much as we believe that the second wave of debt induced and low cash resources precipitated deals is just around the corner. While it has been a hard slog getting to this point, that it has, means that the team must now do anything and everything to make it a success for the Company's owners.
Serica Energy (LON:SQZ – 11p) – Reset, Restart: The last year’s results (out today) have underlined just how much progress the Company has made in what has been strong headwinds. That said, the Company is entering a transition phase, one in which it starts to have increasing flexibility to pursue a wider consolidation strategy with its cash flow. In so doing, the Company needs to reset its mind-set and repeat the progress it has made, to continue to strengthen its core, with the reason being that it is easy to relax and seem like your making progress, only to find yourself sliding backwards. That said, the Company is in a good position, and it's owners should not only be happy with the progress that has been made, but the outlook for its future.
Jupiter Energy (LON:JPRL,ASX:JPR – 10p/A$0.25) – Stark Update: The Company update today doesn't make happy reading, and we believe that the share price reflects this. However, what is undeniable, even against the bleak oil price backdrop, is the progress that the management team has made with the resources it has available. Save for the current oil price environment, we believe that the Company would have been significantly ahead of where it is now, built upon the solid foundations that the management team have provided. To that end, that today's update is a blunt uncompromising statement of the current position that the Company finds itself in, and with the immediate outlook remaining weak, we believe that there will be more to come, until that is, the oil price moves above $50/bbl, when the gearing effect will cause Jupiter's share price to outperform, and the investment to date will be fully reflected in the share price.