Headlines
In Brief:
Circle Oil (LON:COP – 1.88p) – (BUY – 11p) – Reserves and Resources Update
Gulf Keystone Petroleum (LON:GKP – 5p) – Strategic Update
Ophir Energy (LON:OPHR – 77p) – Fortuna FLNG
In Brief
Circle Oil (LON:COP – 1.88p) – (BUY – 11p) – Reserves and Resources Update: Today's reserves and resources update is a reflection of the current price environment. We believe that the core competency within the Company remains solid and it remains a solid operating base from which to grow, provided that is, that the Management team are given the opportunity to trade out from under its debt pile. We are reiterating our BUY Recommendation and 11p Target Price, but as we said initially, debt is still very much the decider.
Gulf Keystone Petroleum (LON:GKP – 5p) – Strategic Update: Today's news from the Company underlines the pressure that it is under to maintain operational integrity in the face of increasing balance sheet pressure. We believe that the asset, even at current prices, can support the debt in cash terms, provided that the management team are given sufficient headroom to sweat the asset. We have no doubt that this news will provide a headwind to the shares, but in the longer term, we continue to believe that the core of the Company remains robust.
Ophir Energy (LON:OPHR – 77p) – Fortuna FLNG: While today's news that Schlumberger have dropped out of the reckoning for the development of Fortuna is disappointing, the project continues to make progress. That in this price environment the FID is still this year and first gas in 2020 is a testament not only to the asset, but the management team too. While this will represent a headwind for the Company, we do not believe that it impacts the wider investment proposition.