Headlines
In brief:
Frontera Resources (LON:FRR – 0.10p) – How Much and When?
Petro Matad (LON:MATD – 8p) – Cash Provides Flexibility
Roxi Petroleum (LON:RXP – 9p) – 2017 A Year of Transition
Serica Energy (LON:SQZ – 18p) – Shaping up Nicely
Tlou Energy (LON:TLOU/ASX:TOU – 8p/A$0.13) – Vindication of Approach
In Brief
Frontera Resources (LON:FRR – 0.10p) – How Much and When?: While ordinarily we would applaud diversification away from a single asset, in this instance the positives of diversification are offset potentially wholly, by the fact that the management have taken so long and so much to progress their existing acreage. What we would be keen to understand is what the cash burn is going to be over the next 18 to 24 months and what the milestones are, and what we say for the Moldovan acreage also applies to its pre-existing Georgian acreage. Otherwise we fear it will be more of the same.
Petro Matad (LON:MATD – 8p) – Cash Provides Flexibility: There is no doubt that the Shell money will enable the Company to gain flexibility, but the question now becomes what the next funding steps will be beyond the Shell funds, which management must be clear on, otherwise the market could interpret a lack of guidance from the Company as the absence of a strategy in the wake of Shell’s departure. However, the good thing is that the Company is in control, for the immediate future anyway.
Roxi Petroleum (LON:RXP – 9p) – 2017 A Year of Transition: While there has been limited progress in the past 12 months due to economic constraints, today’s news demonstrates the benefits of the top choices that the Company has made. With a rising oil price and a solid track record in appraising its assets, we believe that 2017 could be the year that the Company starts to realise the value that has been inherent in its asset base.
Serica Energy (LON:SQZ – 18p) – Shaping up Nicely: Today’s update from the Company is a solid step forward, and starts to see the hard work that the management team has put in in the oil price environment start to bear fruit. Now that the Company has a more secure footing, the question will now need to turn to what the Company intends to do next, which is a luxury problem to have.
Tlou Energy (LON:TLOU/ASX:TOU – 8p/A$0.13) – Vindication of Approach: Today’s news is further confirmation, if any were needed, of the potential of the Company’s Lesedi project. The field development plan currently being developed will enable the Company to map out how the field will be monetised.